Is it possible to get a mortgage on minimum wage?

[strawberriesarenot]

Asking for a First time buyer, small flat 120,000. They have 30k deposit. Aged 26 on full time minimum wage.

What does that equate to?

Is that 36 hours? 40 hrs?

Either way I think they’d need a 5x salary mortgage, and there are few lenders who do that, and they’d also restrict it to higher earners (less risk, a greater proportion of their pay is left over after paying for essentials), so I think they’d struggle.

Can you be more precise about full time minimum wage? What is that as an annual salary and do they have a permanent job, not temporary hours or whatever they call it nowadays?

Why is the first time buying asking you who is asking MN instead of just asking a mortgage broker?
The market changes frequently - much better to ask an expert, especially when they can do so for free!

They are not asking me. They have made an offer to someone I am responsible for. I wanted to know if it was realistic.

Why did you feel you had to ask?

If they are earning £20k they should be ok

Ok so £120,000 less £30,000 is £90,000.

You can usually borrow 4x to 4.5x their salary.

So £90,000 / 4 = £22,500.

And £90,000/ 4.5 = £20,000.

So they'd need £20,000 - £22,500 salary to buy the flat.

Get them to call land and country mortgages. They're very good.

D0lphine
Thank you, that's really helpful.

I thought it was worth asking to find out why you were asking here, and because (as you were lacking knowledge) it would be useful to tell you that mortgage brokers are free and the situation changes frequently.

You seemed more polite to the next poster who also suggested a broker?

If you are not sure if they can get a mortgage to back up their offer, then don’t accept the offer without them having secured a mortgage in principle - which they can talk to a broker about..

It sounds tight but depending on exactly how many hours they work (full time can be anything between 35 and 40 hours pw) and the length of their employment they might make the income multiple, although they'll also have to pass the stress test and it would depend on other commitments like loans, credit cards, car payments, childcare, plus any benefit entitlement if they have DC, possible expected career progression and credit history.

You could work out the salary and put the details into an online price comparison site to see what comes up.

Id be v wary on that income to even think about buying a flat.

I had a v modest 2 bed flat which i bought in 2013. From then to 2022 the service charge rose from £1050 per year to £6500, and the post grenfell insurance for the flat went from 300 to £2990 per year. Add the fixed 300 ground rent (not to mention mortgage and bills) and i was struggling on a teaching salary over £40,000 pa

Leasehold was hell. Management companies saw each flat as an utter cash cow and there was nothing we coukd do about it. Their threatening letters over payment, added fees and interest for late payments, meant that i would have been bereft on a minimum wage salary.

DONT CONSIDER A LEASEHOLD FLAT ON MINIMUM WAGE.

If that Is all you can afford, DONT BUY.

IT WILL FINANCIALLY WRECK YOUR LIFE.

Diamond7272
Thanks for the warning. Poor you, but tens of thousands of young people do buy leasehold flats. However, it's not me that's buying, and it's not London, and it's not a towerblock style place, it's just a little studio. Service charge £40 a month.

Are you being asked to be the guarantor?

Whats their monthly wage? And the mortgage cost? Have they got enough money for bills, food, everyday living costs etc?

No, no, just for advice.