We use a minimal number of cookies to enhance your browsing experience - you can change your settings at any time.
checkmyfile The UK's only Multi Agency Credit Report

Take a FREE 30-day no obligation trial today. Call us on 0800 612 0421 for assistance.

Lending Multiplier

Definition of 'Lending Multiplier'

When a lender assesses you for a mortgage they will typically use a calculation to decide how much they can lend you. This will normally be based on a multiple of your income for example 3.5 x income. So if you earn £20,000 a year you would be able to borrow a maximum amount of £70,000. In recent years with the sharp increase in the price of housing lenders have had to adjust these calculations to keep pace with house prices. This has seen this simple calculation often be used less as lenders switch to using calculations based on a percentage of the customer’s income.

So for example their repayment cannot exceed 40% of their monthly income minus existing financial commitments. The maximum mortgage amount can then be calculated from the payment amount. See also Multiplier.

Browse All Definitions

Use the links below to locate the term you are looking for. If you can't locate it, please get in touch.

Accepted Payment Methods: VISA, MasterCard and Direct Debit

© Copyright Credit Reporting Agency Ltd 2000 to 2013. All Rights Reserved.

United KingdomAustraliaUnited States via TrueCredit