How Much Can First-Time Buyers Borrow? A Complete Guide

Buying your first home is an exciting milestone, but figuring out how much you can borrow can be overwhelming. With property prices at record highs, many first-time buyers find that traditional lending limits don’t stretch as far as they’d hoped—especially in the South of England, where house prices are significantly higher than the national average.

Understanding your borrowing power before you start house hunting is essential. It helps you avoid disappointment, focus on properties within your budget, and put you in a strong position when making an offer. Lenders assess affordability based on a range of factors, including your income, deposit, outgoings, and credit history. While most will lend between 4.5 to 5 times your income, some offer up to 5.5 or even 6 times, depending on your circumstances.

This guide will break down what determines how much you can borrow, how to improve your mortgage potential, and why speaking to a mortgage broker can make all the difference.

How Much Can First-Time Buyers Borrow?

Most mortgage lenders offer between 4.5 and 5 times your annual salary, but a few go further in specific situations. Some lenders provide up to 5.5 or even 6 times income if you meet certain criteria, such as having a higher deposit or taking out a long-term fixed-rate mortgage.

For example, if you earn £40,000 per year, you could typically borrow:

• 4.5x income: £180,000

• 5x income: £200,000

• 5.5x income: £220,000

• 6x income: £240,000

With the average UK house price currently around £285,000, first-time buyers often need to maximise their borrowing to secure the right home. This is especially true in London and the South, where prices are significantly higher.

Some lenders, such as Nationwide and Halifax, offer enhanced borrowing options for first-time buyers who take out a 5-year fixed mortgage, allowing them to borrow up to 5.5 or even 6 times their income. However, these products typically require a minimum income of £40,000 per year.

What Determines How Much You Can Borrow?

Your Deposit

The more deposit you can provide, the better. Lenders typically require at least 5% of the property value, but increasing this to 10% or more can give you access to better mortgage deals and potentially increase your borrowing power.

Your Income & Employment

Lenders assess your basic salary, but they may also take additional income into account, such as:

• Overtime, bonuses, and commission (some lenders consider 50-100% of these).

• Future salary increases (if you have a confirmed pay rise in writing, some lenders allow you to use this up to three months in advance).

Self-employed applicants usually need at least one to two years of accounts, with lenders typically averaging your earnings over this period.

Your Outgoings & Debts

Lenders will review your monthly expenses to ensure you can afford the repayments. Key factors include:

• Loan and credit card payments.

• Car finance or lease agreements.

• Childcare costs and other regular commitments.

• Your debt-to-income ratio—the percentage of your income already committed to debt repayments.

Your Credit Score

A strong credit history increases your chances of securing a mortgage and could improve the amount you can borrow. Lenders look for:

• A history of on-time payments.

• Low credit utilisation (not maxing out credit cards).

• No recent defaults or missed payments.

If your credit score is low, improving it before applying can make a big difference to your borrowing potential.

Mortgage Type

The type of mortgage you choose can affect affordability. Some lenders offer higher income multiples for borrowers who opt for a 5-year fixed-rate mortgage rather than a shorter-term or variable-rate deal.

Joint vs. Single Applications

Buying with a partner or family member can significantly increase the mortgage amount you’re eligible for. Some lenders also offer guarantor mortgages, where a parent or relative helps secure the loan.

First-Time Buyer Schemes

Several lenders offer specialist products designed to help first-time buyers borrow more. Nationwide’s Helping Hand Mortgage, for example, allows eligible buyers to borrow more than standard affordability rules typically permit.

How to Increase Your Borrowing Power

If your borrowing amount isn’t quite enough to afford the home you want, there are several ways to improve it:

1. Increase Your Deposit – A larger deposit reduces risk for lenders and improves the mortgage deals available to you. The biggest benefits come at deposit milestones of 10%, 15%, and 25%.

2. Clear or Reduce Existing Debts – Paying off credit card balances, personal loans, or car finance can free up more of your income for mortgage affordability.

3. Improve Your Credit Score – Make sure all bills and credit payments are made on time, and avoid applying for new credit just before your mortgage application.

4. Use Additional Income – Some lenders consider overtime, bonuses, commission, and even benefits as part of your income, so maximising this can help.

5. Consider a Joint or Guarantor Mortgage – Applying with a partner or family member can boost your affordability, and some lenders allow guarantors to support your application.

6. Opt for a 5-Year Fixed Mortgage – Some lenders offer higher borrowing multiples for long-term fixed-rate deals.

7. Work with a Mortgage Broker – Brokers have access to lenders who offer more generous income multiples and specialist first-time buyer products. A broker like Strive Mortgages can help you find the best options for your circumstances.

Affordability vs. What You Should Borrow

While it’s tempting to borrow the maximum amount a lender offers, it’s important to ensure your mortgage is personally affordable. Just because a lender is willing to give you a large loan doesn’t mean you should take it.

Think about:

• Long-term suitability – Moving home is expensive and stressful, so try to buy a property that meets your needs for the foreseeable future.

• Future expenses – Factor in the cost of running a home, potential interest rate rises, and life changes such as having children.

• Your lifestyle – A high mortgage repayment could limit your ability to enjoy holidays, social events, or hobbies.

Final Thoughts

With house prices at an all-time high, knowing how much you can borrow is more important than ever. While most lenders offer between 4.5-5 times your income, some stretch to 5.5 or 6 times, particularly for first-time buyers who take a 5-year fixed mortgage.

If you’re struggling to get the borrowing amount you need, working with a mortgage broker can help.