Expert Mortgage Advice & £300,000 Mortgage Deals Suitable For You

If you are looking at taking out a £300,000 mortgage to purchase your new home, it is beneficial to know what steps are involved in borrowing that size sum and any other key information that will give you the best chance of getting your mortgage application accepted. Our team of specialist advisers at Finance Advice Centre can help guide you through the process and answer any questions you might have to equip you with all the knowledge you need for your mortgage application.

The amount you need to put down for your mortgage deposit will depend on the prospective property’s price and whether you are classed as ‘high risk’. A lot of mortgage lenders set the maximum loan-to-value (the size of the mortgage compared to the property price) to 90%, meaning you would need a 10% deposit. Though some lenders can accept as little as 5%, other mortgage lenders might require you to put more down, for example, if you are looking at a mortgage with bad credit.

You will generally get access to more lenders and better rates if you are in a position to put a higher deposit down like 20%, since this reduces the risk to the lender if you default on your mortgage payments. If you want to take out a £300,000 mortgage, keep in mind that this is just the loan, not the total value of your property. You could get a £300,000 mortgage for a house worth £315,000 and put down a 5% deposit of £15,700, whereas a £300,000 would require a 5% deposit of £15,000, so you would need a mortgage amounting to £285,000.

Most lenders will determine how much you can borrow using a multiple of your income. They do this to see if you can comfortably afford your repayments and other expenses. For example, some lenders might provide loans at 4.5x your annual income, although some lenders may be prepared to do 5x, and in some circumstances a few might consider up to 6x.

So, to qualify for a £300,000 mortgage, you typically would need to earn around £67,000 a year (either individually or collectively) based on 4.5x your income, £60k on 5x income, and £50k on 6x income. However, some mortgage providers assess applications on a case-by-case basis to make their decision. While income is important, it is worth noting that the majority of lenders will factor in what percentage of your salary goes on other bills, in order to assess affordability.

Debt-to-income

Lenders will also work out your affordability by assessing your debt-to-income ratio. To do this they will look at your monthly income minus any outgoings. The lower your debt-to-income the better as it shows lenders that you have more disposable income to put towards mortgage payments. These expenses might include:

• Council tax
• Utility bills including gas, water, and electricity
• TV packages and broadband
• Car insurance
• Credit cards & Loans
• Car finance
• Home and contents insurance
• Childcare costs