Residential Mortgages
A residential mortgage is a loan used to buy or refinance a home that you or your family will live in. It’s the most common type of mortgage — but lenders assess it carefully because it’s based on your personal income, commitments and credit profile, not rental income or business structure.
This means two people with the same income can be offered very different mortgage amounts depending on their commitments, spending habits and overall financial profile.
Because every lender uses its own affordability model, residential mortgages can vary massively from one provider to another. A lender who is strict on overtime, for example, might lend far less than one who accepts 100% of it. Someone with a few historic credit blips might be declined by one bank but accepted by another.
That’s why choosing the right lender is key — it’s not just about the interest rate, it’s about how they view you. A good broker matches your real-life circumstances to the lender most likely to support you, resulting in a smoother process and a borrowing amount that more accurately reflects your situation.
What makes me eligible for a mortgage?
What makes residential mortgages unique is the way lenders assess them. They’re not looking at rental income, projected yields or business performance — the entire decision is based on you as an individual (or household). That means lenders analyse your situation in a much more detailed and personal way than they do with an investment mortgage.
1. Your income
Lenders want to understand exactly what you earn and how consistent it is. They’ll look at:
Basic salary
Overtime and shift allowances
Bonuses and commission
Self-employed income (SA302s, accounts, trading history)
Benefits and allowances
Additional household income
Different lenders treat these differently. Some will take 100% of your overtime, while others take none. Some are generous with bonus income; others are strict. This alone can change your maximum borrowing significantly.
2. Your monthly commitments
Affordability is about what you can genuinely afford each month, not just what you earn. So lenders also look at:
Loan and credit card payments
Car finance or PCP
Childcare costs
Maintenance payments
School fees
Other regular spending
These are deducted from your income before a mortgage is calculated. High commitments can reduce the amount you can borrow, even if your income is good.
3. Your credit profile
Residential lending is sensitive to how you’ve managed credit in the past. Lenders check:
Missed or late payments
Defaults or CCJs
Credit utilisation
Overall borrowing behaviour
Stability of your credit footprint
Some lenders are very strict. Others are far more flexible, especially if issues are historic or now resolved. This is why the right broker makes a big difference — picking a lender who understands your situation can avoid unnecessary declines.
4. Your current and future living costs
Lenders now test affordability based on realistic living expenses, stress-testing your finances to ensure the mortgage remains affordable even if interest rates rise. They review:
Family size
Utilities
Council tax
Travel and commuting
General household spending
This ensures you don’t overstretch yourself financially.
5. The property itself
Even a residential mortgage depends on the property meeting the lender’s criteria. They consider:
Construction type
Age and condition
Location
Lease terms
New build rules
Flats vs houses
Unusual properties may require specialist lenders or additional checks.
What next?
If you are looking for a mortgage solution that suits your needs and budget, we are here to help. Please visit our contact us page and fill out a simple form with your details and query.
We will get back to you as soon as possible with the best options for you. Thank you for choosing us as your mortgage partner.