First-Time Buyers Could Now Borrow Up to 6.5 Times Their Income

Buying your first home can be challenging, particularly when rising property prices mean the amount you need to borrow is higher than traditional mortgage affordability calculations allow.

However, there’s some positive news for first-time buyers.

Coventry Building Society has updated its lending criteria, potentially allowing eligible first-time buyers to borrow up to 6.5 times their income.

This could make a significant difference for buyers who have a suitable deposit and a good income but have previously struggled to borrow enough to purchase the property they want.

How Much Could a First-Time Buyer Borrow?

Many mortgage lenders typically cap borrowing at around 4 to 4.5 times annual income, although the amount available will always depend on individual circumstances.

Under Coventry Building Society's updated criteria, eligible first-time buyers may now be able to borrow up to 6.5 times their income.

For example, based purely on income multiples:

£30,000 income – potentially up to £195,000
£40,000 income – potentially up to £260,000
£50,000 income – potentially up to £325,000
£60,000 income – potentially up to £390,000
£75,000 combined income – potentially up to £487,500

These figures are examples only. The actual amount you can borrow will depend on the lender's full affordability assessment, including your financial commitments, credit history and personal circumstances.

What Are the Criteria?

The enhanced borrowing isn't available to every applicant, but it could provide a valuable option for many employed first-time buyers.

For borrowing of up to 6.5 times income, Coventry's current criteria include:

• Applicants must be first-time buyers

• No applicant can be self-employed

• A minimum income of £30,000 for a sole application

• A minimum combined income of £50,000 for a joint application

• All applications remain subject to Coventry's affordability assessment and lending checks

Importantly, being able to borrow 6.5 times your income doesn't automatically mean you will qualify for the maximum amount.

You Could Buy With Just a 5% Deposit

Another potential obstacle for first-time buyers is saving a large enough deposit.

Coventry also offers eligible first-time buyers mortgages at up to 95% Loan to Value (LTV).

This means you could potentially purchase your first home with a deposit of just 5% of the property's value.

For a £200,000 property, for example, a 5% deposit would be £10,000.

For a £300,000 property, it would be £15,000.

Family Can Help With Your Deposit Too

If you're fortunate enough to have family willing to help you purchase your first home, Coventry has also widened its criteria around gifted deposits.

Gifted deposits can be accepted from a range of family members, including aunts, uncles and adopted children, potentially providing first-time buyers with more options when putting together their deposit.

Could You Borrow More Than You Think?

One of the biggest reasons to speak to a mortgage broker before assuming a property is outside your budget is the significant difference between lenders' affordability calculations.

Two lenders looking at exactly the same income and circumstances can sometimes offer very different maximum mortgage amounts.

The introduction of borrowing at up to 6.5 times income for eligible first-time buyers is another example of why it can be worth exploring the wider mortgage market.

If you've previously been told you can't borrow enough, or you've used an online mortgage calculator and assumed the property you want is outside your budget, it could be worth checking again.

First-Time Buyer Mortgage Advice in Chester

At Mortgage Support Chester, we can assess your income, deposit and circumstances and search the mortgage market to establish how much you could potentially borrow.

We'll also help you understand the costs involved, obtain an Agreement in Principle and guide you through the mortgage process from your initial enquiry through to getting the keys to your first home.

Thinking about buying your first home? Get in touch with Mortgage Support Chester today and let's see what could be possible.

Your home may be repossessed if you do not keep up repayments on your mortgage.

Mortgage availability and lending criteria are subject to change. The amount you can borrow will depend on your individual circumstances and the lender's affordability assessment.