Once you're retired, or approaching it, lenders shift from assessing salary to assessing pension, drawdown, annuity and investment income, as explained in our Mortgages for Older Borrowers guide. Combine your retirement income sources below to estimate what you might realistically be able to borrow.
Why the income multiple matters more here than for employed borrowers
| Income multiple applied | Effect on £38,500 total retirement income |
|---|---|
| 4.5x (standard employment-style multiple) | £173,250 estimated borrowing |
| 4.0x (a common, more conservative retirement-income multiple) | £154,000 estimated borrowing |
| 3.5x (a more cautious lender) | £134,750 estimated borrowing |
As explained in our Older Borrowers guide, some lenders assess pension and investment income on its own merits, at the same multiple as employment income; others apply a lower multiple specifically to retirement income sources. This single difference, as shown above, can change your borrowing estimate by tens of thousands of pounds on identical income, which is exactly why it's worth checking a specific lender's approach, or using a specialist broker, rather than assuming a standard multiple applies.
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