Supersize mortgages – how much can you really borrow?

Supersize mortgages – how much can you really borrow?
So-called ‘supersized’ mortgages have hit the headlines following the launch of a new mortgage enabling professionals to borrow up to six times their salary.

The mortgage, offered by Darlington Building Society, is available to those looking to borrow up to 90% of the property value. To qualify, you’ll need to work as an accountant, actuary, barrister, engineer, doctor, optometrist, pharmacist, solicitor or a vet. That’s because people working in these roles are more likely to have incomes which rise over time.

If you’re a joint borrower hoping to take out a mortgage with Darlington, but you’re not classed as a professional, the maximum you’d be able to borrow would be 4.5 times your income.

Darlington is not the only lender to offer mortgages at higher income multiples to those working in certain professions. Clydesdale, for example, will consider lending up to 5.5 times your salary if you’re a newly qualified professional looking to borrow up to 95% of the property value.

Affordability matters

Although some lenders will consider higher income multiples, affordability remains the key test.

Lenders will always scrutinise borrowers’ financial circumstances carefully to make sure that higher mortgage repayments will remain affordable over time before allowing them to borrow several times their salary.

They will not only look carefully at your income, but will also examine your outgoings, including other debts and spending on things like utilities, travel and childcare. Many lenders will also have maximum income multiples, which could limit the maximum borrowing even if you’re able to demonstrate that the mortgage is affordable.

Lender flexibility

Some lenders adopt a varied approach, so the amount they’ll be prepared to lend depends on several factors. For example, Barclays can offer as much as five times your income in the right circumstances. However, if the amount you’re borrowing is in excess of 90% of the property value, the maximum you can borrow will be capped at four times your income.

Halifax may also lend up to five times your income, but to be eligible your income must be greater than £75,000 a year, and you’ll need a 25% deposit, or the equivalent amount of equity if remortgaging. This would also only apply on mortgages up to £500,000.

Santander is also prepared to lend up to five and a half times your income, although you’d need a salary of more than £100,000, and a 25% deposit or equity.

Regulations mean that lenders can only offer up to 15% of their mortgages at income multiples of more than four-and-a-half times, so this is typically the maximum most will lend.

However, for the right applicant there can often be flexibility, provided they can prove the mortgage is affordable. Seek professional advice if you’re not sure how much you might be able to borrow.

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