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NEWS: First Time Buyer Mortgage at 5.5 Times Salary Now Available
A major high street bank is now offering 5.5 times salary mortgages for first time buyers.
Typically, the largest mortgage you can reach as a first-time buyer is capped at 4.5 times your income for most lenders.
But with house prices at record highs across the UK, first-time buyers need to stretch their income as much as possible to get to the loan values they need. A 5 and a half times income mortgage does exactly this.
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Do you still need a bigger mortgage?
What if I'm not a first time buyer?
How Much of a Deposit Do You Need for a 5.5 Times Income First Time Buyer Mortgage?
The lender in question is accepting just a 5% deposit for their 5.5x salary first time buyer mortgage.
It's one of the most attractive first time buyer products on the market, particularly if you're struggling to reach the loan size you need for your new home.
What Else Do I Need to Qualify?
- First of all, the 5.5 times salary mortgage in question is only available as a 5 or 10 year fixed rate product.
While inflation levels in the UK have begun to fall, there's still speculation as to whether interest rates will continue to rise after the Bank of England raised the base rate 15 consecutive times in 2023.
This product locks your rates in place for the rest of the term, which could be suitable if you’re concerned about interest rates climbing higher in the next 5-10 years.
We talk more about interest rates in our article here: Are Mortgage Rates Going Down?
- You can’t be self employed
Unfortunately, this product isn’t available to self employed first time buyers, so you must be in full time, permanent employment.
But don’t worry, there are plenty of self employed mortgages that we provide our clients with every day – you may just need to put down a higher deposit or accept a lower income multiple.
Read our related guide, here: Self Employed Mortgage - How to Improve your Chances of Getting One
- You also need to be a first time buyer to qualify for this product
However, the lender will classify anyone who hasn’t had a mortgage for 3 years as a first time buyer, whereas most lenders typically require 7 years to qualify, so your chances are improved.
Related: What is a Green Mortgage, and how do they work?
You'll also need to have a minimum income of £30k as a sole applicant, or 50k for joint applicants. However, the lender does offer the opportunity to include multiple income sources in your application.
Where Else Could I Get a 5.5x Times Salary Mortgage?
There is currently only one lender on the market that offers 5.5x times salary mortgages to first time buyers at this income level.
However, if you're a high earner or a professional working in a career with high job security and employability (engineer, lawyer, accountant etc.) there are a few lenders willing to stretch to as much as 6x your salary, even at 90% LTV.
An experienced mortgage broker can give you a comprehensive idea of your options, streamline the application process, and present your application to the lender in the best possible light.
Struggling to Get a First Time Buyer Mortgage at the Level You Need?
If you're still struggling to get the mortgage you need, you can boost your mortgage budget even further with the help of your family - without needing a cash gift.
Even with the 5% deposit scheme, most first time buyers are struggling to afford the value of an average property in the UK with their deposit savings and income. It's simply due to the disproportionate rise of house prices in comparison to wages since the 1990s.
And while many first time buyers turn to their parents for help towards a deposit, many families don’t have the cash on hand to gift to them. Their wealth is tied up in their own property or their pensions.
But there are other ways that your parents could help with your mortgage.
- Deposit Booster
We can leverage the equity your family member has accumulated in their home to get you a bigger deposit for your first house, without them needing to sell their house, draw from their pension, or sell other assets to raise funds.
- Income Booster
Or, we can use their annual income on your mortgage application in a "joint borrower, sole proprietor mortgage" (JBSP). This means they can add their income onto yours without needing to be named on the property deed or securing the mortgage against their home.
Get in touch, and ask about income or deposit boosters for first time buyers to find out more.
Can I Get a 5.5 Times Salary Mortgage if I’m Not a First Time Buyer?
Yes, you can. But you may need to put down a higher deposit depending on your income sources and financial circumstances.
In fact, we recently reported about a new product coming to market from a mortgage lender offering 5.5 times salary mortgages with just a 15% deposit.
Read about it here: NEWS: The Return of High-Street Banks Offering 85 Percent LTV Mortgages at 5.5 Times Salary
Get in Touch
If you’re wondering how to achieve the maximum loan amount for your income and circumstances, give us a call today to speak to a mortgage adviser who will connect you to the right lender for you.
We can tell you how much you can borrow and help you maximise your borrowing potential.
Get in touch at 0203 900 4322 or book a free consultation below.
