What is a good debt-to-income ratio for a mortgage?
What is a Good Debt-to-Income Ratio? Most UK lenders consider 20% to 30% a low-risk range. Borrowers within this limit typically receive more favourable mortgage rates. Some lenders do not impose a maximum limit (they assess applications on an individual basis) and may accept a debt-to-income ratio of 45% to 50%.
What is the upper limit on a mortgage loan?
The upper limit ensures your lender never charges more than the capped rate. Besides the upper limit, it also comes with a collar. The collar is a cap that limits your rate from falling beyond a particular rate. Though you’re protected from higher rates, the collar keeps your rate from falling significantly.
How much of my income should I set aside for mortgage?
In general lenders do not like more than 60% of a person’s income going toward their mortgage and monthly outgoings. Nationwide also offers a similar calcualator, though it has quite a few steps in it and collects some personal data like your birthday.