How much do you need to earn to get a mortgage of £100 000?
To get a £100,000 mortgage you will need to show the mortgage lender that you can afford the monthly repayments on a £100,000 mortgage with your current income.
To get a mortgage of £100,000 most mortgage lenders will want to see the combined salary of everyone who is going on the mortgage to be at least £25,000. Some mortgage lenders will accept £20,000, and a minority of them will offer you a mortgage of £150 000 if you earn £16,666.
Most mortgage lenders will initially offer you a mortgage in principle based on an income multiple which they use to determine if you can afford a £100,000 mortgage.
Mortgage lenders use income multiples of between 3 and in some cases 5.5. This means your affordability of a £100,000 mortgage will depend heavily on how much you earn per year and what income multiple the mortgage lender is using.
A good mortgage broker will have an idea of what income multiple a mortgage lender may work with and will be able to advise you of how much you may need to earn to get a mortgage of £100,000 with a specific mortgage lender.
Aside from income multiples mortgage lenders will also look at other factors before they provide you with a mortgage offer most mortgage lenders will take an in-depth look into your finances to see if you can afford a mortgage.
Mortgage lenders will look into your basic living expenses, your lifestyle expenses and your monthly income to work out what your monthly disposable income will be.
Your monthly disposable income will be a strong signal to determine how much you will need to earn to get a mortgage of £100,000 as sometimes the income multiples only provide you with a guide and your specific spending behaviour on a monthly basis will be the huge determining factor as to if you can keep up monthly mortgage repayments on a £100,000 mortgage.
The amount you need to earn to get a mortgage of £100,000 will then depend on what mortgage term you want, what your monthly mortgage repayments will be and if your disposable income will cover those monthly mortgage repayments on a £100,000 mortgage.
The monthly repayments on a £100,000 mortgage could be much higher if you need a specialist mortgage such as a bad credit mortgage or a self-emplyed mortgage. If this is the case then you may need to earn more than usual to afford a £100,000 mortgage.
The best way to figure out how much you will need to earn will be to use a mortgage affordability calculator or speak to a mortgage broker.
What are the repayments on a £100,000 mortgage?
An example of what you could pay on a £100,000 mortgage could be: £100,000 over 25 Years at a rate of 5.5 % will incur a monthly repayment of £614.09 and a total repayable of £184227.00.
How much deposit do I need for a £100,000 mortgage?
A £100,000 mortgage will mean you have at least between 5% – 20% for a mortgage deposit.
This means if you want a £100,000 mortgage you already have between £5,000 and £20,000 for your mortgage deposit.
This will be the first basis of your affordability of a £100,000 mortgage.
You can improve your mortgage affordability by using one of the governments first-time buyer schemes.
This will mean you can put down a smaller mortgage deposit or be eligible for a reduction in the property price.
Some of the mortgages you could get with a £100,000 mortgage include:
Fixed-rate £100,000 mortgages:
With these mortgages, the rates are fixed for a period of 2, 3 or 5 years and provides you certainty over your mortgage term.
Variable rate £100,000 mortgages:
You can access a host of variable mortgages through a mortgage lender and these mortgages will have a variable rate which can be increased or decreased at any time by the mortgage lender.
Tracker £100,000 mortgages:
You can access a host of tracker mortgages from most mortgage lenders. These mortgages will usually track the bank of England’s rate and will move in line with it although it may not be the exact rate but rather a rate which will increase by the same point or increase by the same point as the bank of England rate.
You can access a host of remortgage options for a £100,000 remortgage.
£100,000 buy to let mortgages:
Some buy to let mortgage lenders have a minimum amount they will lend but you may be able to get a £100,000 buy to let mortgage with some specialist buy to let mortgage lenders. A buy to let mortgage broker will be able to assist you in this regard.
First-time buyer government schemes which you could get with a £100,000 mortgage include:
You may be eligible for some first time home buyer government schemes which may reduce the total cost of the property or increase your mortgage deposit.
- Lifetime ISA– gives you a government bonus of £1,000 if you save the 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- same as 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.
The second basis of affordability for a £100,000 mortgage will be your salary.
Most mortgage lenders use your annual salary x a multiple to see how much they could lend to you.
If you want a £100,000 mortgage you will need your salary when multiplied by a multiple of 3 to be at least £100,000.
Most lenders will use multiples of between 3 and 5.
What do the repayments on a £100,000 mortgage look like?
Mortgage repayments on a £100,000 mortgage will differ based on lenders and it wouldn’t be wise to simply provide details that can change at any moment here.
To see if you are eligible for a £100,000 mortgage, speak to a mortgage broker.
How much would a £100,000 mortgage cost per month?
£100,000 over 25 Years at a rate of 5.5 % will cost £614.09 per month.
What’s the monthly payment on a £100,000 mortgage?
The monthly payment on a £100,000 mortgage will vary based on the APR which you pay on the mortgage. e.g over a term of 25 years at an APR of 5.5% you will pay £614.09 as your monthly payment but with an APR of 1.5% over the exact mortgage term of 25 years, you will pay £399.94 as your monthly payment.
Can I get a mortgage for £100,000?
Yes, you can get a mortgage for £100,000. Speak to a mortgage broker to further assess your mortgage affordability but there are mortgage lenders who are willing to lend you £100,000.
Can you get a 0% LTV £100,000 mortgage?
Yes, there are mortgage lenders who will offer a £100,000 mortgage.
They are a certain type of mortgage known as a family springboard mortgage, they include mortgages from lenders such as the Barclays family springboard mortgage, the lloyds lend a hand mortgage or the post office family link mortgage.
Can you get a £100,000 mortgage with bad credit?
Yes, you may be able to get a £100,000 mortgage with bad credit but this will heavily depend on your circumstances. You should always look to build credit when you have bad credit as this could improve your mortgage affordability.
A bad credit mortgage broker may also be in a better position to carefully analyse your situation and provide you with suitable bad credit mortgage lenders willing to lending to you.
If you are bankrupt then you may need to wait for 12 months after you have been discharged from being bankrupt to get a £100,000 mortgage
Bad credit may include:
- A CCJ
- An IVA
- A debt management plan
- A default
- A bankruptcy
- A home reposession
How to get a £100,000 mortgage?
Getting a mortgage can be a very difficult process if not handled with care.
If you are considering getting a mortgage for £100,000 then using a mortgage broker may be a good choice as mortgage brokers usually have access to many more products than any specific mortgage lender.
Mortgage brokers will also usually have access to specific deals from mortgage lenders as well as experience on which mortgage lenders will be more likely to accept your case. This will help you avoid getting rejected on a mortgage application and having to build credit due to the damage a rejection might do to your credit score.
If you have bad credit or are self-employed then specialist mortgage brokers such as bad credit mortgage brokers or self-employed mortgage brokers may be useful.