You cannot buy more home than what your verifiable net monthly income qualifies you for. Your typical income multiple with us will be within 3x and 8x of your net annual income: the specific multiple will depend on your current age or remaining active working years till retirement.
Mortgage Income Multiples is your annual income multiplied 3 times your income, 4 times your income, 5 times your income etc to see how much you can borrow. Different lenders will offer different amounts.
Mortgage Income Multiples will show you how much you can borrow or how much home you can afford (maximum and minimum) depending upon circumstances.
WHAT ARE MORTGAGE INCOME MULTIPLES
A mortgage income multiple is simply a multiple of your annual income, used by mortgage lenders to get an idea of the size of a home loan you can afford. For example, if you were earning GHs40,000 a year and a lender used a mortgage income multiple of 4, then they would take 4 x GHs40,000 – GHs160,000 – as the maximum they would be prepared to lend you.
Historically, income multiples were much more fixed when calculating mortgage offers, but nowadays, many lenders are more flexible and will look at your broader financial picture to get an idea of how much you can afford to borrow.
TYPICAL MULTIPLES
Although there is no hard and fast rule regarding mortgage income multiples, 4 or 4.5 times your annual salary is an average. It is often used as the basis of any initial calculations. Depending on other factors, which we’ll explore in more detail below, you may get a 5 times income mortgage, a 5.5 times, or even a mortgage for 6 times your salary.
In very particular circumstances, you may be able to secure a 7 times income mortgage, although these are very rare and normally only apply to high net worth individuals.
Professional mortgages for people working in specific industries, such as teaching, medicine, and law, often offer higher income multiples, normally up to 5 or 5.5 times salary.
Very similar rules apply for joint mortgages as for single mortgage applicants. Sometimes, a lender will offer a slightly reduced income multiple - 4 times income, for example, for a joint application as opposed to 4.5 times for a single salary - but often, it’s the same across both mortgage types. It simply means both salaries are added together for the purposes of the calculation and treated as one household income.
MORTGAGE AFFORDABILITY CALCULATOR
It’s hard to know exactly what income multiple you might get without speaking to a specialist broker or direct lenders, but with our mortgage affordability calculator you can get an idea of the size of mortgage you could be offered at your salary, based on different possible salary multiples.
EXAMPLE CALCULATIONS
The table below shows typical mortgage calculations for a range of different salaries and income multiples. To get your annual income, you simply multiply your net monthly salary or income by 12 (12 months).
SUPPLEMENTAL INCOME BENEFITS
Your basic annual salary isn’t the only form of income that lenders will consider when assessing affordability, so it’s important to give your mortgage provider the fullest possible picture of your financial situation so that they can properly assess the maximum mortgage you can get.
Bonuses, overtime and commission could all count, and in each instance, evidence will need to be provided through payslips, often taken as an average over a period of months or years. How much of a bonus is accepted will usually depend on whether or not the bonus is guaranteed or discretionary.
The table below gives an overview of what to expect. As you can see, approaches vary significantly between lenders, so if any of these apply to you then talk to your broker so that they can prioritise your different income types and find the best lender.
Outside of income from employment, we may accept supplementary forms of income such as benefits like child benefits or tax credits, rental income from buy-to-let properties, investment income and pension income.
HIGHER INCOME MULTIPLES
Income multiples can feel quite restrictive, especially if you’re on a lower income, and you might be worried that you won’t be able to afford the mortgage you need. However, we will be able to look at your income, including supplementary income that you might not previously have considered, like overtime, bonuses and benefits, and work out the best way to maximise your borrowing potential.
INCOME MULTIPLE FACTORS
Because income multiples aren’t the only factor that determines the size of a mortgage, it’s important to have an understanding of what other factors might impact your borrowing limits. Essentially anything that makes you less of a risk in the eyes of lenders is a good thing.
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Income Employment Type
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