With property prices predicted to drop by 14% in 2021, it’s come as no surprise that we’ve received an influx of enquiries from customers hoping to take a step onto the property ladder.
That being said, buying a property will still set you back a pretty penny; as of July this year the average cost of a house in the UK is £237,963. So if you’re looking to buy a new home and estimate you’ll need a mortgage in the realm of £210k, you’ve come to the right place.
This guide will give you an idea as to how much deposit you’ll need to get a £210,000 mortgage, and expand on a number of other factors that may affect your eligibility.
Am I eligible for a £210,000 mortgage?
If you want a rough idea of how much you may be eligible to borrow based on income and savings, you can input your details into a mortgage calculator. But for a more accurate estimation, you’re best off having a discussion with a mortgage advisor.
Working with a broker means they’ll take the time to understand you, your finances and personal circumstances, and recommend suitable lenders with the most favourable rates to match your requirements.
How does my income impact my eligibility for a £210k mortgage?
Income is a key factor when you apply for a home loan because it gives lenders a good indication as to whether your earnings are sufficient to cover your monthly repayments alongside any other outgoings you have. This is referred to as affordability.
Affordability is determined by calculating your debt-to-income ratio, which measures your income against your other monthly outgoings, such as:
Any debts you have including loans, credit cards or car finance payments.
Household bills.
Other other outgoings such as travel costs or childcare fees.
How much do I need to earn for a £210,000 mortgage?
Every lender will likely have a different set of criteria they follow when deciding how much they can lend to you, but it’s commonplace to use income multiples as a starting point.
The majority of lenders provide mortgages of up to 4.5x your salary, although some are more generous than others. Depending on your affordability, credit history and other factors, you may be offered a loan of up to 5.5x your income.
Using the benchmark income multiple of 4.5, in order to qualify for a £210k mortgage you would need to earn a minimum of £46,667 a year. Of course, this isn’t the sole determining factor; you’ll also need to meet the additional criteria of your chosen lender.
If you’re applying for a £210,000 mortgage on your own, your mortgage provider will want proof, in the form of bank statements, pay slips or tax returns, that you can afford your mortgage (alongside your other outgoings).
Can I get a £210,000 joint mortgage?
If you’re looking to apply for a joint £210k mortgage, this should theoretically increase the amount you can borrow and give you access to more competitive interest rates.
This is not purely down to the fact that ‘two incomes are greater than one’; mortgage providers may deem your application as less risky (i.e. less likely to default) if you have two separate incomes.
That being said, if one of the applicants has a history of bad credit or low affordability this may hinder your chances - but this is very much dependent on your circumstances as a whole and how recent and / or severe the issues are.
How much deposit do I need to get a mortgage of £210,000?
Although there are lenders out there offering 90% loan-to-value (10% deposit) mortgages, in the current market the majority require a minimum of 15 - 20% deposit. Applying for a low LTV loan can often give you access to a wider range of lenders and better rates.
That being said, interest rates are currently low across the board - but this doesn’t mean you won’t be able to secure yourself a competitive deal. With the right mortgage advice, it’s very possible to get a mortgage with favourable terms.
The table below illustrates the relationship between deposit size and mortgage amount for a property with a market value of £210,000:
Property value | Deposit size (%) | Deposit size (GBP) | Mortgage size | LTV ratio |
£210,000 | 5% | £10,500 | £199,500 | 95% |
£210,000 | 10% | £21,000 | £189,000 | 90% |
£210,000 | 15% | £31,500 | £178,500 | 85% |
£210,000 | 20% | £42,000 | £168,000 | 80% |
£210,000 | 25% | £52,500 | £157,500 | 75% |
Of course, your personal circumstances will be taken into account, and if you’re seeking a commercial mortgage or investing in a buy-to-let property, the deposit requirements are different.
How does my credit history impact getting a £210k mortgage?
As established, every lender has different criteria when determining a mortgage applicant’s eligibility.
When it comes to credit history, some providers will not accept anyone who has experienced any form of adverse, whereas others are happy to accept less severe instances, and a few will consider recent and / or severe issues.
Applicants who have IVAs, CCJs or bankruptcies on their file may find it difficult to find a suitable mortgage provider, especially if they have small deposits. If you fall within this category, we encourage you to seek assistance from an experienced mortgage broker.
Our team of experienced advisors can quickly identify the lenders that are more likely to approve £210k mortgages, even in instances of bad credit. A mortgage rejection can negatively affect your credit score further, so be sure to seek advice before applying.
Can I get a £210,000 buy-to-let mortgage?
If you’re seeking a £210k mortgage for a buy-to-let (BTL) investment, expect to pay a larger deposit than you would for a residential mortgage. BTLs are generally perceived as higher risk because they are reliant on the owner finding tenants to cover the repayments.
BTL lenders will also look at other factors, including your personal finances, affordability, credit history, age and property type to establish eligibility.
Some lenders may require in excess of 40% deposits, so for a £210,000 mortgage you’d need a hefty £84,000 down payment.
Contact a mortgage broker about a £210k mortgage
If we haven’t covered your questions surrounding your £210,000 mortgage, don’t hesitate to get in touch. Give us a call on 02380 980304, or use our online contact form.
Our expert advisors will be in touch with practical tips on how you can improve your chances of approval, and provide advice on the most financially viable routes for your circumstances.
023 8098 0304