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To secure a mortgage in the UK, your earnings play a crucial role. Lenders typically assess your income to determine how much they're willing to lend you. However, the exact amount you need to earn can vary depending on several factors, including the size of the mortgage you're applying for, your credit history, your expenses, and the specific requirements of the lender.

In general, lenders often use an affordability calculation to assess your ability to repay the mortgage. This calculation considers your income, any additional sources of income, your regular outgoings such as bills and expenses, as well as any existing debts or financial commitments.

While there's no fixed minimum income requirement to qualify for a mortgage, most lenders prefer borrowers to have a steady and sufficient income to comfortably afford the repayments. Typically, lenders aim for your mortgage payments to make up no more than a certain percentage of your gross income, often around 25% to 35%. However, this can vary depending on individual circumstances and lender policies.

It's important to remember that meeting the income requirements is just one aspect of securing a mortgage. Lenders also assess other factors such as your credit score, employment status, deposit size, and overall financial stability. Therefore, it's advisable to speak to a mortgage advisor or broker who can provide personalised advice based on your specific situation and help you navigate the mortgage application process.

The key things they'll look at are...

Credit score and history:

This gives them an indication of how you manage your money and pay your bills, as well as help them understand if you'd be a reliable borrower.

Personal income:

Lenders will also need to know the amount you earn. With this information at hand, including any bonuses and tax credits, they’ll be able to offer you a mortgage that suits your needs and pocket.

Your outgoings:

Mortgage providers scrutinise how much of your monthly income you spend to evaluate the size of your deposit and how it was accumulated.

What Proof of income do i need to get a mortgage?

It varies from lender to lender, but mortgage providers will require the following proof of income for your mortgage application:

1-3 of your most recent payslips

Your P60 (for up to 2 years)

Evidence of 2-3 years of bonuses if they're a significant chunk of your earnings

Proving your income ought to be the easy part of a mortgage application. And for UK-based PAYE salary earners documenting your earnings is fairly straightforward.

But for everyone else, from self-employed and contract workers to company directors, barristers, expats and seafarers, you need to know which lenders will consider your circumstances and what evidence they want.

The documentation needed will depend not just on you and your personal circumstances, but also the type of mortgage you’re looking for.

What is the minimum income I need for a mortgage?

How much income you need to qualify for a mortgage will ultimately depend on the amount you need to borrow.

As a guide, banks and building societies will typically lend a maximum of 4.5 times your annual income, or your joint income if you are buying with someone else.

This means that if your total income is £25,000, the maximum amount you will be able to borrow is £112,500. Or put the other way, to borrow £150,000 you would need earnings of £33,333 a year.

Some people will be able to borrow up to and in excess of 5.5 times their salary, but these deals are typically reserved for ‘professionals’, such as lawyers, doctors, or dentists, who will quickly see their incomes rise. Higher earners may also qualify for higher income multiples.

It is also worth bearing in mind that income doesn’t just mean your salary or earnings. Lenders will also consider income from other sources. For example, pension income, child maintenance and overtime payments may be considered.

In order to ensure you will be able to afford repayments in the future, lenders will also conduct ‘stress tests’ to establish how you will cope if interest rates rise or your circumstances change – for example, if you lose your job or can’t work because you become ill.

What other support is available if I have a low income?

There are a number of schemes that can help low-income borrowers get a mortgage.

Shared Ownership:

This allows you to purchase part of a property and pay rent on the remainder. Schemes are available to first-time buyers with household earnings below £80,000 (or £90,000 in London), as well as those who have previously owned property but can no longer afford to get back on the ladder.

Right to Buy:

This scheme enables tenants of council properties to purchase their home at a discount.

Help to Buy Equity Loan Scheme:

This no longer available in England but will run until March 2025 in Wales.

This gives buyers access to an equity loan to help them purchase a new-build property with a minimum 5% deposit. Although this scheme doesn’t increase your income, it does reduce the amount you need to borrow.