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For a £200,000 mortgage on your own, you need a salary of roughly £36,000 to £44,500, depending on the lender. Across my panel the income multiples I see accepted run from 4.5 to 5.5 times salary: £200,000 divided by 4.5 is £44,444, and divided by 5.5 it is £36,364. The top of that range depends on the lender, the level of income and the size of the deposit, and 4.5 times is the figure to plan around.
On a joint application the same multiple is applied to combined income, so two people each earning £25,000 would be assessed on £50,000.
Can I get a £200,000 mortgage on a £40,000 salary?
At 4.5 times, £40,000 gives a maximum of £180,000, so on your own £200,000 needs a lender that goes to 5 times or more, a joint applicant, or a larger deposit so that the loan needed is smaller. At 5 times, £40,000 supports exactly £200,000, subject to affordability, and affordability is where the multiple stops being the whole story.
Is the income multiple the same as affordability?
No. The multiple is a cap. Underneath it, every lender runs an affordability calculation that takes your net pay, deducts committed outgoings and living costs, and stress tests the result against a rate higher than the one you would actually pay. The multiple tells you the ceiling. The affordability calculation tells you whether you reach it. Both are set out in my how much can I borrow guide, and the borrowing calculator gives a first estimate. This article is part of my first time buyer mortgage hub.
At 4.5 to 5.5 times income, a £200,000 mortgage on a single salary needs roughly £36,000 to £44,500
A £40,000 salary at 4.5 times supports £180,000, so £200,000 needs a higher multiple, joint income or more deposit
Car finance, childcare and student loan repayments reduce the affordability figure even when the multiple is met
How does the deposit change the picture?
The deposit changes the loan, not the multiple. If the property is £250,000 and you have £50,000, you need £200,000 and the salary question is as above. If you have £70,000, the loan drops to £180,000 and a £40,000 salary at 4.5 times gets there. The property price is the same in both cases. The deposit has done the work.
A bigger deposit also lowers the loan to value, and lenders price their products in LTV bands, so a loan at 80% LTV is looked at differently from one at 90%. Some lenders apply a lower maximum multiple at 90% and above, which means a small deposit can affect both the rate band and the multiple at the same time.
Worked example. Property £240,000. Deposit £24,000, so the loan is £216,000 at 90% LTV. At 4.5 times that needs £48,000 of income. Deposit £48,000 instead, loan £192,000 at 80% LTV, and at 4.5 times the income needed is £42,667. The extra £24,000 of deposit has reduced the salary needed by over £5,000 and moved the loan into a different band. On joint income, £192,000 at 4.5 times is £42,667 combined, so two salaries of £22,000 would clear it on the multiple alone, though a household with two adults has higher assessed living costs, so the affordability side may say otherwise.
Lenders treat income types differently too. Basic salary counts in full. Overtime, bonus and commission are counted in part or in full depending on the lender and on whether they are regular and evidenced over one or two years. Self-employed income is taken from accounts or SA302s, and a second job, benefits or maintenance may be counted in part. Borrowing more than £200,000? I have worked the same figures for a £300k mortgage and a £400k mortgage.
How do commitments reduce what I can borrow?
The multiple is applied to gross income, but the affordability calculation runs on what is left after commitments, and this is where a £44,000 salary that looks fine on paper can fall short of £200,000.
Car finance is the usual one. A £350 a month PCP is £4,200 a year that the lender treats as unavailable for the mortgage. Because the lender works back from what is left each month to a loan size, a monthly commitment reduces the maximum loan by considerably more than its own annual cost.
Childcare is counted as a committed outgoing by most lenders, and nursery fees of £1,000 a month are treated much like a loan repayment of the same size. Some lenders take a softer view where the child is close to school age.
A student loan is deducted from net pay as a percentage of income above the threshold for the plan you are on, so it reduces the affordability figure without being a fixed debt. Credit cards are usually assessed on a percentage of the outstanding balance rather than the limit, so a card cleared each month does little, while a £5,000 balance carried over counts.
Clearing a commitment before applying, where that is possible, changes the calculation immediately. Some lenders also ignore a commitment with fewer than six months left to run. The full list of what counts is on my residential mortgages page.
What I see in practice
Across my panel, 4.5 to 5.5 times income is the range I see accepted, with the top of that range depending on the lender, the level of income and the size of the deposit. On a £200,000 loan that puts the salary needed somewhere between roughly £36,000 and £45,000 for a sole applicant with no other commitments.
Speak to an expert
If you want the figure for your own salary rather than a rule of thumb, send me your last three payslips and a note of your monthly commitments and I will run it across the panel.
What is worth checking before applying?
Which figure you are quoting. Lenders work from gross basic salary, and the figure on your P60 or your latest three payslips is what they will use, not the package on your contract or a bonus that has not yet been paid.
Whether a joint application makes sense. Adding a partner’s £20,000 income to your £40,000 changes the multiple calculation, but it also adds their commitments and their credit history to the assessment.
Whether the deposit can be larger. Gifted deposits from family are accepted by most lenders with a signed letter confirming it is a gift, and £10,000 more deposit is £10,000 less loan, which at 4.5 times is £2,222 less salary needed.
Whether you have just moved job. In my experience the most common delay on a payslip case is applying before the first payslip in the new role exists. Waiting for it is usually quicker than applying without it.
The multiple is a rule of thumb and a maximum. Whether a lender will lend £200,000 to you depends on your income, your outgoings, the deposit and the lender’s own policy, and it is the affordability calculation rather than the multiple that decides. A mortgage quote against your actual payslips replaces the estimate with a lender’s figure.
Need Personal Mortgage Advice?
Every buyer’s situation is different. While this guide explains the general rules, the right mortgage for you depends on your income, deposit, credit history and future plans. If you’d like tailored advice, I can help, with 120+ lenders to choose from.
