How can anyone afford to get a mortgage when banks supposedly only loan out x3.5 of your yearly salary?

[TwixBix1]

Most people when talking about buying a house always complain about how difficult and long it was to save up enough for the deposit (which is 5% minimum but can be more)..

Yet to me, it seems the deposit isn't too bad and it's finding a mortgage that'll cover the rest which is impossibe.

Say I wanted to buy a £250k flat/house and I pay 20k deposit towards it. That means the mortgage should cover 230k.. if banks only give mortgages up to x3.5 of your salary, surely I''d need to be earning at least £65,000 to get a mortgage for a measly 250k flat or house?

If that's the case, I feel like very few people would be homeowners..

Aside from having a joint mortgage, what's a way to get around this?

@flumpybear

Can you get a guarantor for your mortgage? You could borrow more but check your affordability.

Who the hell would be a guarantor for someone's MORTGAGE (which would probably be £150K to £200K?!)

My house was only 30k aim for something a little less lavish to get you through you can always go through the process again later in life I'm happy with my little house it was a bit of a fixer upper needed a kitchen fitting and a few bits doing nothing too drastic it's cozy 2bedrooms just what I need xx

We saved a 40% before we took out our mortgage. Maybe you need to save for longer and/or look for a cheaper property?

I think a lot of people buy as part of a couple. The people I know who have bought as singles, have bought houses in the £150k range (doable in Scotland where I live) or have had a fairly hefty deposit to put down through inheritance or something.

youngmammy Where go you live that your house was 30k?! That's less than our deposit!

OP, it sounds like you're in an expensive part of the country. Realistically, you need to buy with someone else (making 65k a decent household income) or buy elsewhere.

The single people I know who've bought have

• saved very, very hard for 10+ years.
• saved hard, bought during the 2007

/8 crash, bought a very tiny flat.

• bought to rent out somewhere cheaper, and uses the rental income to pay part of her rent in London.

I cannot imagine that in their late 20’s they are earning enough to have a mortgage for £380k

Why on Earth not? Some careers are very lucrative- I know a similarly aged couple with a £500,000 house. Mortgages also don't have to be the full value of the house if you have a large deposit. Get on the ladder early, pay it off quickly and your second house can be quite an upgrade.

Mortgages haven't been calculated on a salary multiplier for years. It's about the affordability calculations now - how much would the repayments be, and how does that relate to your income and outgoings? If you're under 35 they're generally happy to calculate based on a 30-year repayment term.

The answer to "how does anyone afford to get a mortgage" is that most people don't, not on their own. They do it with a second earner, and/or with help from family (or an inheritance).
A high proportion need both a partner and a gift/inheritance.

When we first bought in 1991 we had to buy jointly, not in a single name, to afford a small 3 bed terrace.

I bought my lovely flat in a good area for 110k last year with a 5% deposit. It can be done outside the SE.

Everyone I know in the SE who's bought did so with the help of a substantial inheritance.

I heard recently that in the uk the average deposit is £20k - in London it’s £100k. Bloody hell that’s a lot.

But then when the banks were lending 5/6 times your salary people got badly stung when the recessions hit (and the banks made out like bandits with repossessions).

We saved a deposit of £80k. Only way we could do it. We also worked two jobs each.

You can get 100% mortgages with several lenders now, although your parents would have to offer their property as additional security, or lodge some savings as security (at a very good interest rate)

If you are a recently qualified professional some lenders will lend 6x your salary.

Shared ownership, help to buy and the new starter home initiative can all help.

Nows a great time for first time buyers - see a broker

The average house price in the whole of the UK is £230,000ish obviously it'll depend on area but straight away you're already looking at more expensive than average homes. Have you looked at how much the mortgage payment would be on a 95% LTV mortgage of about £230k? You're looking at over £1000 so this is why you need a big income to start with, to afford it. Not to mention rates rising. You've either got to have a big deposit or a big income to get a house that price, if you've only got 5% then you'll need a big income. Buying on your own is going to be so much harder, especially if £250k is standard where you are. We have had to buy a small first time home to build equity to buy our forever home later when we have a bigger deposit, I don't want a huge mortgage.

A lot of the time there's 2 salaries to account for and people buy in cheaper areas for their first house - mine was 70k (and only 5 years ago) so our salaries didn't need to be huge, we were then able to quickly move onto the next bigger house.

I could borrow exactly 56k. Which would buy me a parking place or half a beach hut 👌

We are in the SE. There is nothing here for under £200 thousand (including flats) and even then you would struggle to find somewhere.

It's very hard to save for a deposit when you are also paying high rent. My son pays £800 rent per month out of a take home pay of about £1400. Might sound ok but then he has travel costs to pay, some bills etc. He lives there because of his job and it isn't always easy to find another job elsewhere.

Well £250K is not "measly" its above the UK average for a house.

Most people do not expect to get an above average family home for the first buy as a single low paid worker.

Go to some mortgage advisors and get a calculation on how much you can afford based on your salary, your savings and your outgoings. Then look to buy what you can afford based on that. For most people I know, their first property was a studio or one bed flat, and often they had to move to less expensive areas to afford to buy. There's also shared ownership schemes etc which may help.

You need to focus on what you are able to afford, not on what you want. If you do not like what you are able to afford, then you will need to find a way to increase your earnings or your deposit.

All the “affordable” properties around here are bought off plan by a conglomerate of landlords.

For conglomerate you can read a group of baby boomers with nothing better to do with their time.

Well most people start with something a while lot cheaper than 250k and work their way up, although if you are somewhere like London that may be impossible. I would not consider a 250k house to be measly, perhaps you need to either change your standards or live somewhere cheaper. Our current house and previous house were around that price point, both 3 bed with decent gardens in nice areas.

We bought a tiny one bed flat as our first 'house buy'....Why does a first time buyer need a house with garden?

Salary multiples are a very blunt instrument and although people still talk about them they very rarely if ever used when underwritting a mortgage these days.
Affordability is key, they look at your income and outgoings and see how much of a mortgage payment you can afford, they then factor in interest rate changes. The longer you borrow over the more you can likely borrow as it reduces the monthly cost of a repayment mortgage.
If you have been paying rent at a similar amount to the mortgage payments and still saving then it is likely this will be taken into account as evidence that you can cope with the mortgage.

I had to save for years (no treats, no holidays, no phone, no tv, etc) to get enough of a deposit, then I came into a little bit which helped. Still, I ended up with something smaller than I wanted and it was very tough. The reason they won't lend you more is that they know people can't keep up with payments (i.e. to protect you from reposession in the future)

Most people can’t buy on their own and can’t buy a property that costs £250k. Two people with £20k salary could easily borrow about £140k, which will buy you a flat in some (most?) cities or a small house outside of the city. A lot of people (me included) had to wait for inheritance to be able to buy a bigger house.

Single adults in the past rarely bought houses.
Most people when they buy their first place buy something small. So a 1 bed flat for example, and then build up some equity.

weetabix I have family who have bought in the SE for less than that. But probably in areas you would not consider.