We’ve listed the factors that could affect your eligibility and have also explained how much income you’ll need to earn, while comparing deposit sizes for 150k properties.
Am I eligible for a 150k mortgage?
First things first, every mortgage is different and each lender will have a different set of criteria that they use to assess whether you’re eligible for their approval.
Finding the right mortgage is usually a lot quicker with the assistance of a mortgage broker because they’ll know where to look and which lenders can provide you with the type of mortgage you’re looking for, with terms that are affordable.
How does my affordability affect a mortgage for £150,000?
Lenders want to loan to customers who are more likely to repay their debt in full and on time. To determine this, they’ll look at factors including:
Age - older borrowers can be given shorter mortgage terms
The hours you work i.e. part time or full time
Your credit history
The amount of debt you have
The cost of your outgoings
The type of property you’re buying - some structures or building materials can be expensive to repair and maintain, so lenders will want to check you can afford them.
How do I provide evidence of my income for a £150k mortgage?
Depending on whether you’re employed or self employed, your lender will likely ask for evidence of your income in the form of:
When calculating your affordability for a 150k mortgage, lenders will also look at your outgoings including:
Any debts you have including credit cards or car finance payments
Other outgoings such as travel costs or childcare costs
If they think that your current circumstances won’t allow you to easily repay your mortgage, your outgoings and any repairs and maintenance of the property, they’re unlikely to approve your loan.
If however, they calculate that your income is sufficient enough to cover your repayments and your other outgoings, it may be possible to get approved for a £150,000 mortgage.
How much do I need to earn for a £150,000 UK mortgage?
There isn’t necessarily a minimum income required to get a mortgage as lenders will consider other factors other than your income, such as the term of the mortgage or your credit history, to decide if they can accept you or not.
That being said UK lenders are prone to using income multiples when considering mortgage applications.
Some lenders use a multiple of 4.5 x a yearly salary, others 5 and in exceptional circumstances, a handful of lenders use multiples of up to 6 x a person’s annual income.
Higher income multiples tend to be considered when applicants are deemed as good borrowers, so that will usually mean a high credit score and a credit history that demonstrates timely payments.
So, hypothetically, if your chosen lender used an income multiple of 4.5, to qualify for a £150,000 mortgage, you’d need a minimum income of £33,333 a year.
Can I get a mortgage for £150k if I’m self-employed?
Your ability to get approved as a self employed borrower depends on a multitude of factors, including your credit history, reliability of income and gross yearly income.
If you’re able to prove you have an income and potentially a future income, in the form of contracts, that is enough to repay your mortgage, a lender could be willing to accept your application.
You’ll also need:
Two or more years' certified accounts
A tax year overview (from HMRC) for the past two or three years
Keep in mind that some lenders deem self employed borrowers as higher risk and they can ask for higher deposits.
This isn’t always the case but it can be helpful to have a mortgage broker check the market to compare a range of lenders as it may be possible to get a mortgage with a lower deposit requirement.
How much deposit do I need to buy a £150,000 house?
Most UK lenders are asking their borrowers to put down 15 - 20% of the property's market value, though this certainly isn’t always the case as some lenders can still offer advantageous deals.
Having a larger deposit can mean having to save a little longer but it can also make the cost of borrowing cheaper in the long run. Another benefit of having a larger portion of the property’s value as a deposit is that sometimes it can allow you to access a wider range of lenders, who may be more open to lending at lower loan to value rates.
See the table below to learn more about how your deposit size can lower the amount you have to borrow.
Deposit size as a percentage
Deposit size in GBP
Can I get a BTL mortgage for £150,000?
It may well be possible to obtain a buy-to-let mortgage for £150,000, though it can be easier with the assistance of a mortgage broker who will know the lenders that are most likely to accept you.
Some lenders can be cautious about providing mortgages with higher LTV ratios, so may ask you for a higher deposit. Your other circumstances can also affect how much deposit you’ll need for a BTL mortgage, though you can expect to need a minimum deposit between 20 - 40% of a property's market value.
If you were to apply for a mortgage for £150,000, that could mean that you’ll need a £60,000 deposit.
Where can I find the best mortgage deal for a 150k mortgage?
Finding a lender to approve a mortgage for £150,000 can be easier with the help of a professional who knows the market and can guide you through the process.
Not only can this help you save money by finding the cheapest interest rate but it can also help you to avoid unnecessary mortgage rejections.
Call 02380 980304, use our contact form to let us know about your plans to get a mortgage for 150k.