Good question. There are two main methods used by mortgage lenders. They will either base the amount they will lend to you on your income or your affordability.
If you last got a mortgage when the mortgage lenders were offering admittedly too much, sometimes five or six times income then this time around the answer to the question of how much can I borrow will be much less than before.
You can expect most lenders to typically offer four times the amount for a single person application or three and a half times of a joint income application. If a lender is using their affordability calculator will calculate the amount you can borrow based on factors like, if you have dependants and your credit record. If you have no children, a clean credit record and two incomes some lenders may lend a little bit more. The above figures should only be taken as an indication; the actual amount you will be able to borrow will vary between lenders depending on how they score you and or your partner.
You can ask your existing mortgage lender how much can I borrow? This will give you a rough idea of what is available to you in the current market and what they can offer you when your current deal comes to an end. However there are thousands of different mortgages to choose from. You could contact the mortgage lenders yourself but that is be very time consuming, can be stressful and frankly a boring task to perform. You could use a comparison service to help you search for a deal however the information does vary between services and they don’t search the whole of the market.
The most comprehensive option is to use a mortgage broker that offers whole of market advice. The mortgage broker will search the market for you, find the mortgages to suit your circumstances allowing you to make an informed decision and give you peace of mind that you have chosen the option that is the best mortgage for you. Using a fee free mortgage broker means you can use the services of a mortgage broker without the obligation to continue any further with the application.
