1. How Much Can You Borrow?

UK lenders typically offer mortgages of 4-4.5 times your annual income. Some lenders go up to 5.5x for high earners or certain professions, but this is less common.

Income Multiples

• £25,000 salary: £100,000-£112,500 mortgage
• £35,000 salary: £140,000-£157,500 mortgage
• £50,000 salary: £200,000-£225,000 mortgage
• £75,000 salary: £300,000-£337,500 mortgage

Joint Applications

For couples applying together, lenders add both incomes. For example, if you earn £30,000 and your partner earns £40,000, your combined income is £70,000, allowing you to borrow £280,000-£315,000.

Affordability Checks

Lenders don't just look at income multiples. They also assess your affordability by checking:

• Monthly income vs expenses
• Existing debts (loans, credit cards, car finance)
• Dependents and childcare costs
• Whether you could afford payments if rates increased

Use our Mortgage Calculator to estimate your monthly payments and see if they fit your budget.

2. Deposit Requirements

The deposit is the upfront payment you make when buying a property. The more you put down, the better mortgage rates you'll get.

Minimum Deposits

• 5% deposit: Available but limited lenders and higher rates
• 10% deposit: More lenders and better rates
• 15% deposit: Good range of competitive rates
• 20%+ deposit: Best rates and widest choice
• 40%+ deposit: Access to exclusive low-rate products

Loan-to-Value (LTV)

LTV is the percentage of the property value you're borrowing. A 10% deposit means a 90% LTV mortgage. Lower LTV = better rates.

Help to Buy and Shared Ownership

Government schemes can help first-time buyers with smaller deposits:

• Lifetime ISA: 25% government bonus on savings up to £4,000/year (max £1,000 bonus)
• Shared Ownership: Buy 25-75% of a property, pay rent on the rest
• First Homes Scheme: 30-50% discount on new-build homes

3. Types of Mortgages

There are two main types of mortgages: repayment and interest-only. Most people choose repayment mortgages.

Repayment Mortgage

You pay off both the interest and the capital (loan amount) each month. By the end of the term, you own the property outright. This is the most common and lowest-risk option.

Interest-Only Mortgage

You only pay the interest each month, so your monthly payments are lower. However, you still owe the full loan amount at the end of the term. You need a credible repayment plan (savings, investments, or property sale) to qualify.

Which Should You Choose?

Repayment mortgages are safer and more common. Interest-only can work for buy-to-let investors or high earners with solid investment plans, but most first-time buyers should choose repayment.

4. Fixed vs Variable Rates

Your mortgage rate determines your monthly payment. You can choose between fixed and variable rates.

Fixed Rate Mortgages

Your rate stays the same for a set period (typically 2, 3, 5, or 10 years). This gives you certainty and protection from rate rises. Most people choose 2 or 5-year fixes.

Pros: Predictable payments, protection from rate increases
Cons: Can't benefit if rates fall, early repayment charges if you leave early

Variable Rate Mortgages

Your rate can change over time. Types include:

• Standard Variable Rate (SVR): The lender's default rate, usually expensive. You revert to this after your fixed period ends.
• Tracker Mortgage: Tracks the Bank of England base rate plus a set margin (e.g., base rate + 1%)
• Discount Mortgage: A discount off the lender's SVR for a set period

Pros: Can benefit from rate falls, usually no early repayment charges
Cons: Payments can increase, harder to budget

What's Best?

Most people choose fixed rates for stability. If rates are high, consider a 2-year fix to remortgage when rates (hopefully) fall. If rates are low, lock in a 5-year fix for long-term security.

5. The Mortgage Application Process

Getting a mortgage involves several steps. Understanding the process helps you prepare and avoid delays.

Step 1: Get a Mortgage in Principle (MIP)

Also called a Decision in Principle (DIP) or Agreement in Principle (AIP), this is a conditional offer showing how much you can borrow. It's based on a soft credit check and helps when making offers on properties.

Step 2: Find a Property

Once you have your MIP, start house hunting. Make sure the property price is within your budget, including stamp duty, legal fees, surveys, and moving costs. Use our Stamp Duty Calculator to estimate additional costs.

Step 3: Make an Offer

When you find the right property, make an offer. In England and Wales, offers aren't legally binding until contracts are exchanged. In Scotland, offers are legally binding once accepted.

Step 4: Full Mortgage Application

Once your offer is accepted, submit your full mortgage application. You'll need:

• Proof of identity (passport, driving licence)
• Proof of address (utility bills, bank statements)
• Proof of income (3 months' payslips, 2-3 years' accounts if self-employed)
• Bank statements (3-6 months)
• Proof of deposit (savings statements, gift letters)

Step 5: Property Valuation

The lender arranges a valuation to confirm the property is worth what you're paying. This isn't a survey—it's just to protect the lender. You should get your own survey to check for problems.

Step 6: Mortgage Offer

If everything checks out, the lender issues a formal mortgage offer. This is usually valid for 3-6 months.

Step 7: Exchange and Completion

Your solicitor handles the legal work. Exchange of contracts makes the sale legally binding. Completion is when the money transfers and you get the keys. These often happen on the same day, but can be weeks apart.

6. Additional Costs

The deposit and monthly payments aren't the only costs. Budget for these additional expenses:

Upfront Costs

• Stamp Duty: 0-12% depending on property price (use our calculator)
• Legal Fees: £850-£1,500 for conveyancing
• Survey: £250-£1,000 depending on type
• Mortgage Arrangement Fee: £0-£2,000 (sometimes added to mortgage)
• Valuation Fee: £150-£1,500 (sometimes free)
• Moving Costs: £300-£1,200

Ongoing Costs

• Buildings Insurance: £100-£300/year (mandatory)
• Contents Insurance: £50-£200/year (optional but recommended)
• Life Insurance: £10-£50/month (recommended if you have dependents)
• Maintenance: Budget 1% of property value per year
• Service Charges: £500-£3,000/year for flats

7. Improving Your Chances of Approval

Lenders want to see that you're a reliable borrower. Here's how to improve your chances:

Boost Your Credit Score

• Check your credit report for errors (Experian, Equifax, TransUnion)
• Register on the electoral roll at your current address
• Pay bills on time and clear existing debts
• Don't apply for new credit in the 3-6 months before applying
• Close unused credit cards and overdrafts

Show Financial Stability

• Stay in the same job for at least 6 months before applying
• Avoid gambling transactions on bank statements
• Reduce discretionary spending in the months before applying
• Save consistently to show you can manage money

Increase Your Deposit

Every extra 5% deposit opens up better rates and more lenders. If you're at 5%, try to get to 10%. If you're at 10%, aim for 15%.

8. Remortgaging

Remortgaging means switching to a new mortgage deal, either with your current lender or a different one. Most people remortgage every 2-5 years to avoid their lender's expensive SVR.

When to Remortgage

• End of fixed period: Don't let yourself revert to SVR—remortgage 3-6 months before your deal ends
• Property value increased: Lower LTV means better rates
• Rates have fallen: You might save money by switching
• Consolidate debt: Remortgage to pay off expensive loans (but be careful—this increases your mortgage debt)

Costs of Remortgaging

• Early repayment charge on current mortgage (if leaving early)
• Arrangement fee on new mortgage (£0-£2,000)
• Valuation fee (sometimes free)
• Legal fees (sometimes free with new lender)

Calculate whether the savings outweigh the costs. A mortgage broker can help you find the best deal.

9. Should You Use a Mortgage Broker?

Mortgage brokers can access deals you can't get directly and handle the paperwork for you.

Pros of Using a Broker

• Access to exclusive deals not available to the public
• They do the research and paperwork for you
• Can help if you have a complex situation (self-employed, poor credit, etc.)
• Free advice from many brokers (they get commission from lenders)

Cons of Using a Broker

• Some charge fees (£300-£500 typical)
• Not all brokers access all lenders
• You can do the research yourself if you have time

When to Use a Broker

Use a broker if you're self-employed, have poor credit, need a large mortgage, or simply want expert help. For straightforward cases, you can apply directly to lenders.

10. Common Mortgage Mistakes to Avoid

Avoid these common pitfalls that can cost you thousands:

1. Not Shopping Around

Don't just accept your current lender's renewal offer. Compare rates from multiple lenders—you could save £100-£300/month.

2. Borrowing the Maximum

Just because you can borrow 4.5x your salary doesn't mean you should. Leave room in your budget for emergencies, lifestyle, and rate increases.

3. Ignoring the Total Cost

A low rate with a £2,000 fee might cost more than a slightly higher rate with no fee. Always compare the total cost over the fixed period.

4. Choosing the Wrong Term

Longer terms (35-40 years) mean lower monthly payments but much more interest overall. Shorter terms (20-25 years) cost more monthly but save tens of thousands in interest.

5. Letting Your Deal Expire

Don't sleepwalk onto your lender's SVR. Start looking for a new deal 3-6 months before your current one ends.

6. Not Overpaying

Most mortgages allow 10% overpayments per year without penalty. Even small overpayments can save thousands in interest and clear your mortgage years earlier.

Conclusion

Getting a mortgage doesn't have to be stressful. The key steps are:

• Understand how much you can borrow and afford
• Save the biggest deposit you can
• Improve your credit score before applying
• Choose the right mortgage type and rate for your situation
• Budget for all costs, not just the deposit
• Shop around for the best deal
• Remortgage regularly to avoid expensive SVRs

Use our calculators to understand your numbers and make informed decisions about your mortgage.