Why not share this article? Alex Ritchie. Personal Finance Editor. Alex is a personal finance writer and editor at RateCity, and has been writing about finance for over five years. She is passionate about closing the gender pay and superannuation gap, and aims to help young Aussies to overcome their financial apathy and better manage their finances.
Alex has been published in numerous print and online outlets, including Money Magazine, Lifehacker Australia, and Business Insider. More articles? Read more here. Can I get a mortgage five times my salary? How banks calculate how much you can borrow for a home loan Your financial situation, especially your salary, plays a significant role in determining the size of a mortgage you may be approved for.
When you apply for a home loan, a bank will request you submit various types of information, including: Proof of income Any income-earning assets A list of expenses and ongoing costs rent, utilities etc. You can also read our blog on How to get a large mortgage loan.
Affordability is usually calculated over a standard year mortgage term. If you apply for a 30 or year term, your monthly repayments will be lower. Individual lenders can only provide information about their own mortgage products. A well-connected mortgage broker will know about the full range of mortgages available right across the market and will be able to advise on high income multiple mortgages e.
The result can be a more generous mortgage offer, a cheaper borrowing rate or a variation in the terms such as a shorter initial period with early repayment charges which will suit your individual circumstances better.
Give us a call to arrange a suitable time to talk through what you need:. More about our mortgage service. Read our blog on what proof of income you'll need for your mortgage application.
Categories Bridging. Can I get a mortgage for 5 or 6 times my salary? Read More ». More Opportunities ». If you want to better understand how each of those factors affects your max mortgage amount, read on.
If you have any existing debt — like a car payment, student loans, or a credit card payment — lenders will subtract those costs from your monthy income before calculating how large a mortgage payment you qualify for. Conversely, if you keep your debt low, you might be able to borrow as much as 6 times your salary for a mortgage. Take a look at two borrowers, whose profiles are identical except for their debt—to—income ratios.
Your own rate and budget will vary. This drastically affects how much they can borrow for a mortgage. This could make mortgage qualifying more difficult. However, some lenders are willing to consider alternative forms of credit, like rent and utility payments, for those with thin files. So if you find yourself in this situation, be sure to shop around carefully and look for a lender that can help you.
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