As a first time home buyer, how much can I borrow?

As a first time buyer, how much can I borrow? Read our post on affording your first mortgage and how much can you borrow.



Your mortgage will eventually cost more money than you’ve earnt in your lifetime so far. When you put it like that, the first question that pops up in your mind is — how much can I borrow?

You’ll never be allowed to borrow more than you can afford, so don’t worry, overtime borrowing such a large amount will make perfect sense.

The maximum amount you are able to borrow from a lender is based upon your annual salaried wage. Most commonly lenders allow you to lend between 4 and 4.5 times your annual salary – some will offer 5 times, some 6 and in very, very rare cases, 7 times the amount.

So for example, if you’re earning £20,000 per annum, you likely will be able to borrow between £80,000 and £90,000 towards your much wanted first mortgage.

The entire point of a lender, is exactly that, to lend.

They expect you to be able to return the amount over a number of years (usually around 25) so you should never be able to borrow too much, and as long as you have set a realistic budget, you’ll be golden!

There are a number of online tools that you can take advantage of in order to establish the amount that you’ll be required to pay back per month.

Your number one mortgage resource is a mortgage calculator (just like this one) – simply put in the details of what you’re hoping to borrow, hit the button, and BOOM, you instantly have a stronger understanding of your capability to afford the mortgage you need for the home of your dreams! has loads of cool resources like this, which you should at least be aware of, as they can be the difference in settling for a house, and buying a house you love.

Student loan debt counts in a different manner to your standard repayments on assets such as a car or a credit card as it doesn’t appear on your credit score.

However, you may still be asked about it by lenders and it may slightly affect your ability to get a mortgage. But don’t worry about that too much as it is very unlikely that you’ll be treated negatively due to student debt.

What you should instead be focused on, is making sure all your other debts are cleared appropriately. For example, did you have a student overdraft that needs clearing off? Any financial hangovers from your studies must be dealt with in order to assure your lending power. Knowing how much you can borrow is extremely important when looking to purchase your first home, so make sure you have a full understanding of your ability to lend BEFORE you start looking on the market.

Trust me, there’s no worse feeling than viewing your dream home, but when you sit down with a mortgage broker, you aren’t able to afford it. And that makes me sad too!

Use all the tools you can, have a full overview of your finances to hand, and seek advice wherever you need it!

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