One of the first questions we get asked by home buyers and movers in Newcastle is, “How much can I actually borrow?”.
With rising property prices and changes in household budgets, it’s important to know where you stand before you start your property search.
How do lenders work out what you can borrow?
Every mortgage lender in Newcastle will look at your income, your regular outgoings, and your overall financial situation before deciding how much you can borrow. It’s no longer just about multiplying your salary by a set number; lenders now take a closer look at how you spend your money each month.
They’ll factor in credit commitments, childcare costs, pension contributions, car finance, and even things like streaming subscriptions and gym memberships. The more financial commitments you have, the less you’re likely to be able to borrow, regardless of your headline salary.
Most lenders will also “cap” the maximum they’ll lend as a percentage of your income, which can vary depending on your situation. For example, it’s common to see lending caps of 4 to 4.5 times your annual income, although this can be higher for some applicants with strong affordability.
What does a typical deposit look like?
Your deposit will have a direct impact on how much you need to borrow. The minimum deposit for most mortgages is 5% of the property value, but the more you can put down, the better the deals you’ll unlock.
To help you get a sense of what this looks like in real terms, here are some quick examples:
- For a property priced at £200,000:
- 5% deposit: £10,000 deposit, £190,000 mortgage needed (95% LTV)
- 10% deposit: £20,000 deposit, £180,000 mortgage needed (90% LTV)
- 15% deposit: £30,000 deposit, £170,000 mortgage needed (85% LTV)
- 20% deposit: £40,000 deposit, £160,000 mortgage needed (80% LTV)
LTV stands for Loan to Value and refers to the percentage of the property value you’re borrowing compared to your deposit. Lower LTV ratios usually mean better interest rates.
What can affect my borrowing amount?
It’s not just about income and deposit. Lenders in Newcastle will also look at your:
- Monthly outgoings: Credit cards, loans, car finance, childcare, utility bills, and regular spending
- Employment type: Some lenders are stricter for self-employed, contract, or zero-hours workers
- Credit history: Missed payments, defaults, or adverse credit can impact what you can borrow
- Number of dependants: More dependants mean more of your income is committed
How can I get an accurate figure?
While our how much can I borrow for a mortgage calculator can give you a ballpark figure, the most suitable way to get a true idea of your borrowing potential is to speak to our mortgage advisors in Newcastle.
Our team can review your documents, look at your unique situation, and talk you through what’s possible.
They’ll focus on lenders whose criteria match your personal and financial circumstances, and can point you towards those who are more flexible if you’re self employed in Newcastle, have extra sources of income, or need a lender who can offer a bit more flexibility with your borrowing.
Ready to start your home search?
If you’re looking for a more precise answer to “How much can I borrow for a mortgage in Newcastle?”, we’re here to help.
Book a free initial appointment with our team, and we’ll work through your figures together, helping you understand exactly where you stand and what properties you could be looking at.
If you’re looking at getting a first time buyer mortgage in Newcastle or planning a move, our team can help you explore your options and find out exactly how much you could borrow.
Date Last Edited: July 30, 2025
