If you’re earning £90,000 per year, you may be wondering how much mortgage you can afford. While your salary plays a crucial role, lenders also assess your overall financial situation, including your credit history, monthly expenses, and deposit size.
This guide explores how much you could potentially borrow, factors that influence mortgage affordability, and strategies to improve your borrowing capacity.
How Much Can You Borrow on a £90,000 Salary?
UK lenders generally use an income multiple ranging from 3.5 to 5 times your annual salary to determine how much you can borrow.
- 3.5x salary: £315,000
- 4x salary: £360,000
- 4.5x salary: £405,000
- 5x salary: £450,000 (offered by select lenders)
While these figures provide a rough estimate, your actual borrowing power depends on lender criteria, financial health, and existing commitments.
What Affects Your Mortgage Affordability?
Lenders don’t just look at salary—they evaluate various financial elements before approving a mortgage. Here are some key considerations:
1. Existing Debt and Financial Obligations
Lenders assess how much of your income is already committed to other payments, such as personal loans, car finance, or credit cards. A lower debt-to-income ratio improves your mortgage eligibility.
2. Credit History and Score
A strong credit score can give you access to better mortgage deals and interest rates. If your credit report shows missed payments or high debt utilization, lenders may limit how much you can borrow.
3. Living Expenses and Financial Lifestyle
Your spending habits, including bills, rent, and discretionary expenses, impact how much lenders believe you can afford in mortgage repayments.
4. Deposit Amount and Loan-to-Value (LTV) Ratio
A larger deposit reduces the Loan-to-Value (LTV) ratio, which can lower interest rates and increase lender confidence. A smaller deposit, on the other hand, can lead to stricter lending criteria.
5. Employment Stability and Income Consistency
Lenders favor applicants with consistent and stable employment. If you’re self-employed, you may need to provide at least two years of financial records to verify earnings.
Example Scenario: Buying a Home on a £90,000 Salary
If you earn £90,000 annually, have a 10% deposit, and minimal debts, your potential mortgage affordability might look like this:
- Loan amount (4.5x salary): £405,000
- Deposit (10% of property price): £45,000
- Potential home price: £450,000
However, lenders may adjust borrowing limits based on individual affordability checks.
How Deposit Size Impacts Your Mortgage Options
Your deposit amount directly affects your mortgage terms and interest rates:
- 5% Deposit (£22,500) – Limited lender choices, higher monthly repayments.
- 10% Deposit (£45,000) – Improved mortgage options with better interest rates.
- 20%+ Deposit (£90,000+) – Access to the best deals with lower borrowing costs.
A larger deposit decreases the Loan-to-Value (LTV) ratio, enhancing affordability and lowering lender risk.
Government Schemes for Homebuyers
If saving for a deposit is challenging, you might qualify for government-backed homeownership schemes:
- Help to Buy Equity Loan – Provides a 20% loan (40% in London) for new-build homes with a 5% deposit.
- Shared Ownership – Allows buyers to purchase part of a home and rent the remaining portion, with the option to buy more shares over time.
- First Homes Scheme – Offers 30-50% discounts on selected new-build properties for eligible first-time buyers and key workers.
These programs help reduce the upfront cost of purchasing a home.
Ways to Increase Your Borrowing Power
If you want to secure a higher mortgage or more favorable terms, consider the following:
- Lower Your Debt – Reducing outstanding loans and credit balances improves affordability.
- Improve Your Credit Score – Make on-time payments, lower credit utilization, and avoid excessive borrowing.
- Save a Larger Deposit – A bigger deposit reduces monthly payments and secures better interest rates.
- Consider a Joint Mortgage – Applying with a partner can increase combined borrowing power.
- Consult a Mortgage Broker – Brokers can help you find lenders offering higher income multiples and flexible lending conditions.
Additional Costs to Consider When Buying a Home
Apart from mortgage repayments, consider these additional home-buying expenses:
- Stamp Duty – First-time buyers in England and Northern Ireland pay no Stamp Duty on properties up to £425,000.
- Legal and Conveyancing Fees – Covers property searches, contracts, and ownership transfer.
- Mortgage Arrangement Fees – Some lenders charge setup fees.
- Survey and Valuation Costs – Ensures the home is priced correctly and in good condition.
- Insurance and Moving Costs – Includes home insurance, removal services, and furnishing expenses.
Planning for these costs ensures a smooth home-buying experience.
Selecting the Best Mortgage for Your Needs
Different mortgage types cater to different financial situations. Here are some common options:
- Fixed-Rate Mortgage – Locks in an interest rate for a set term, providing stable monthly payments.
- Tracker Mortgage – Interest rates fluctuate with the Bank of England base rate.
- Interest-Only Mortgage – Lower initial payments but requires a plan to repay the loan principal.
- Variable-Rate Mortgage – Monthly payments can change based on lender rates.
Choosing the right mortgage depends on your long-term financial goals and risk tolerance.
Final Thoughts: Can You Buy a Home on a £90,000 Salary?
An £90,000 salary provides a solid financial foundation for securing a mortgage, but factors such as deposit size, existing debts, and lender criteria determine how much you can borrow.
With strong financial management, minimal liabilities, and a substantial deposit, you could qualify for a mortgage in the range of £315,000 – £450,000.
For expert mortgage advice and access to the best home loan deals, working with a mortgage broker can simplify the process and help you secure the most competitive rates.
