How Much Income Do You Really Need to Buy a Home?

“How much do I need to earn to get a mortgage?”

It’s one of the most common questions homebuyers ask — and the answer depends on more than just your salary.

Lenders assess affordability based on income, debts, expenses, and credit history. Some are more flexible than others, which is where having a broker like Mortgage Knight makes all the difference.

Here’s a practical breakdown of how affordability works — and how to improve your borrowing power.

The Basics: How Lenders Calculate What You Can Borrow

Most lenders use an income multiple, typically offering between 4 and 5.5 times your annual income.

For example:

Earning £40,000 could mean borrowing around £180,000–£220,000.
A joint income of £70,000 could reach £300,000–£385,000.

However, these figures are only guidelines. The true amount depends on your monthly outgoings, credit profile, and dependants.

Tip: If you have minimal debt and strong credit, lenders are more likely to offer at the higher end of the range.

What Affects Mortgage Affordability

Lenders look at your income-to-debt ratio — essentially how much of your income is already committed to other expenses.

Key factors include:

Existing credit commitments (loans, credit cards, car finance)
Childcare costs and dependants
Pension contributions
Regular spending patterns (subscriptions, overdrafts)

The fewer monthly commitments you have, the more you’ll typically be able to borrow.

Different Income Types and How Lenders Treat Them

Not all income is treated equally.

Here’s how various types are assessed:

Basic salary: 100% usually counts.
Overtime/bonus/commission: Between 50–100% depending on consistency.
Self-employed: Based on net profit or salary/dividends over one to two years.
Contractors/locums: Day-rate contracts or averaged income accepted by specialist lenders.
Rental or investment income: May be partially included depending on the lender.

Mortgage Knight advisers can help match your income structure to the right lender’s criteria — crucial for contractors or those with multiple income streams.

Boosting Your Borrowing Power

If your affordability is just below what you need, there are several ways to increase it:

Pay off short-term debt – reduces your monthly outgoings.
Add a joint applicant – combining incomes can increase total borrowing.
Choose a longer mortgage term – lowers monthly repayments (but increases total interest).
Provide accurate income evidence – sometimes switching from net profit to gross turnover (for self-employed) can help.
Use a broker – some lenders have softer affordability checks or accept higher income multiples for certain professions.

How a Broker Helps You Find the Right Lender

Different lenders apply affordability rules differently.

For example:

One bank might cap borrowing at 4.49x income.
Another could go to 5.5x for professionals like doctors or teachers.
Some specialist lenders factor in contract day rates, foreign income, or non-standard employment.

Mortgage Knight’s access to over 90 lenders means we can quickly pinpoint which options suit your profile — saving time and avoiding unnecessary credit checks.

Case Studies

Case Study 1: Ben & Lucy – First-Time Buyers

Combined income: £65,000. Initially offered £290,000 by their bank. Mortgage Knight found a lender willing to go to 5.25x income, increasing borrowing to £341,000 and helping them buy their ideal home.

Case Study 2: Emma – Self-Employed Designer

Emma’s accountant showed £38,000 profit, but she also drew dividends. Using the right lender, Mortgage Knight had both considered, boosting affordability to £210,000.

Case Study 3: James – Contractor Paid in Euros

James’ income was paid in EUR, which many lenders ignored. Mortgage Knight sourced a lender accepting non-sterling income, allowing full recognition of his £75,000 equivalent salary.

Professional Contractor Mortgage Guidance

Not sure how much you can borrow? Let’s find out.

Mortgage Knight’s advisers can calculate your true affordability and match you with lenders that understand your income — giving you clarity and confidence to move forward.

check Your Mortgage Affordability Today