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How much we can borrow: Salary multiplication VS Affordability

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  • How much we can borrow: Salary multiplication VS Affordability

    Hello all, We are planning to buy a house and let out the flat that we are living in. I have been told that the days of salary multiplication has long gone, i was wondering if someone could clarify this or explain about the amount one could borrow from lenders nowadays (comparing to few years back if any different that is).

    I have several income sources. My primary income is in the region of £43k p/a and recently secured a home based part time job that gets me another £13K p/a on top. With the additional of rental income from the flat of around £3500 p/a, i would have in total of around £60k. With that, i could comfortably put around £1400 (we are a low maintenance people with no kids and car) in the mortgage pot for the house. Now this is where i need clarification of how lenders work.

    Based on the affordability of £1400 a month, that could pay for a £280K mortgage (3.5% interest for 25 years), but but based on rule of thumb salary multiplication of 4 which i have been told that apparently 4 is the magic number most banks do nowadays as responsible lending, i would only get £240K. I was wondering which one is the true case? Is there any lenders nowadays that would lend more than 4? maybe 5 even 6?

    Thank you