3.5 times income mortgage (A 3 point guide)

In this brief blog post, we will cover getting a mortgage for 3.5 times your income, whether this may be the most suitable mortgage option for you and how to get a 3.5 times income mortgage.

When looking to get a mortgage, the mortgage lender will usually give you an indication of the maximum they may be able to lend to you with a mortgage multiple also commonly known as an income multiple.

Can you get a 3.5 times income mortgage?

mortgage multiples of around 3.5 and 4 are common but anything above this is rare and will require the very best circumstances for mortgage multiples of 5 times your income and above.

There are mortgage lenders that may be willing to offer mortgages with 3.5x income and most of these mortgage lenders may not require you to have a great credit score and a substantial mortgage deposit before they loan to you.

Yes, you may be able to find mortgage lenders who will borrow you a mortgage for 3.5 times your salary but these mortgage lenders may only offer 3.5 times income mortgages when the circumstances are perfect.

If you are looking for a mortgage lender who will borrow you a mortgage of 3.5 times your salary then you may want to speak to a mortgage broker who may be able to assist you.

FCA regulations limit mortgage lenders from offering more than 15% of their mortgages at mortgage multiples of more than 4.5.

This means that 3.5 times income mortgages are much easier to come by and the mortgage lenders who offer them will mostly be high street mortgage lenders.

If you are a doctor, investment banker, surgeon or similar profession then you may find that getting a 3.5 times income mortgage may be within your reach.

You may also be able to get a 3.5 times income remortgages.

Typically most mortgage lenders will offer you a mortgage for around 3 and 4 times your salary.

To increase how much you may be able to borrow you may need to put down a bigger mortgage deposit and likely have a very good credit score.

By using a joint mortgage you can combine your borrowing power and essentially increase how much a mortgage lender may be willing to lend you individually.

Some mortgage lenders will let up to 4 people get a joint mortgage whilst others will require that joint mortgages are only taken out by a maximum of two people.

You may be able to get a 3.5 times income mortgage as a joint mortgage if you both meet the mortgage affordability requirements of a mortgage lender who offers 3.5 times income mortgages.

If you are unable to get a 3.5 times income mortgage you could still improve the amount of mortgage you are able to borrow by getting a joint mortgage with the maximum amount of people and combining your salaries together.

Because mortgages for 3.5 times income are not rare you may find that the mortgage rate is competitive.

You should consider if saving a bigger mortgage deposit or waiting until your income increases is a better choice than getting a 3.5 times income mortgage.

You may also be able to use a host of first-time buyer and home mover government schemes to increase your mortgage deposit rather than getting a 3.5 times income mortgage.

Some of these schemes include:

  • Lifetime ISA– gives you a government bonus of £1,000 if you save a maximum £4,000 a year.
  • Help to buy ISA– gives a maximum bonus us £3,000 if you save the maximum allowed of £12,000. Before you get either you should consider which is better. Lifetime ISA vs Help to buy ISA.
  • Help to buy equity loan– gives you up to 40% as a 5-year interest-free equity loan. You begin to pay interest at 1.75 % after the fifth year and 1% plus RPI for every year thereafter.
  • Shared ownership– You can buy between 25% to 75% of the property initially with a shared ownership mortgage and then buy more using a staircasing mortgage.
  • Armed forces help to buy– similar to the help to buy equity loan but specific for the armed forces personnel giving them an increased chance of acceptance.
  • Rent to buy– This is the right to buy scheme on which this guide is currently discussing. A different marketing name is just used. Watch out for this when shopping to avoid missing out on eligible properties due to confusion.
  • Right to buy– allows you to buy your home at a discount price.
  • Preserved right to buy– same as above.
  • Right to acquire– similar to the above.

Depending on where you live, you may also be able to take advantage of home buying schemes provided by your local council. Example: In Norwich, the local councils provide the Norwich home options scheme.

3.5 time income mortgages dont usually have high early repayment charges which make them harder to remortgage. Even though you can port the mortgage, this may not necessarily be the best financial option for you.

3.5 times income mortgages are only usually available to prospective mortgage borrowers with little mortgage deposits and typical salaries.

If you want to get a 3.5 times income mortgage then you may want to speak to a specialist mortgage broker who may be able to assist you in finding the best 3.5 times income mortgage options.

Use a mortgage broker for your mortgage in principle

You may want to use an independent mortgage broker to help you get a mortgage on your new home.

Mortgage brokers are important as they can access mortgage products from across the whole of the market in some cases.

This could be over 11,000 mortgage products. This may have some advantages rather than going directly to a mortgage lender.

A mortgage broker will look to understand your financial circumstances and then provide recommendations on which mortgage products may be suitable for you based on your mortgage affordability.

After giving you these mortgage recommendations, most mortgage brokers will seek your consent to apply for a mortgage in principle

This will allow you to shop for your home as more estate agents and sellers may take you seriously and it will also give you confidence that your mortgage is indeed a possibility before you make a full mortgage application. 

Once you have found a home you want to buy and are satisfied with the mortgage offer for your mortgage then the mortgage broker will then look to get you a mortgage offer.

This will come with a key facts illustration document that details the features of your mortgage including how much you will pay per month.

It will also contain information on if there are any limits such as early repayment fees, or annual overpayment limits.

If you are happy with everything you can then go on to secure your mortgage with the help of a conveyancer.

Your conveyancer will manage the legal searches on the property to ensure there aren’t any issues with it.

They will oversee the sales agreement to ensure it is in your best interest, they will manage the transfer of mortgage funds, exchange contracts with the seller or their conveyancer, and set a completion date with the seller or their conveyancer.

This will then bring an end to the conveyancing process, at which point you will receive the keys to the house and move in.

If you need financial advice and you live in the UK then you could contact the Money Advice service over the phone or via chat for impartial advice.

You can also contact the debt charity “Step Change” if you are in debt and need help.