Mortgage application - debt to income ratio question

[CoolHands]

I understand the debt to income ratio is broadly what affects how much you can a mortgage for. Without being sidelined, does anyone know how significantly?

Eg
If debts of mortgage + loan are 1400 and gross income is 3300 then £1,400 ÷ £3,300 x 100 = 42%.
If 400 of that expenditure is actually a loan and you got rid of it then you would instead have £1000 ÷ £3,300 x 100 = 30% debt to income ratio.

So my question is, by what amount does getting rid of the loan help the total amount you could get for a new mortgage. I know there are many factors but I just want to focus on the loan and how getting rid of it benefits the total amount you could get.

I am asking because I’m looking at what the max price property I could get with my salary. But I have £12k loans so want to know if getting rid of them makes much difference to the max they will give me.

Edit sort of answered my own question. Having a play on mortgage calc it looks like 3.75 x the total loan amount is subtracted from what you could borrow. Eg 3.75x£12k = £45k that is taken off the top line of what you could borrow.

Edited by CoolHands on Tuesday 28th December 15:00

[Sarnie]

It has nothing to do with the loan amount. It could be £10k or £40k, if the payment was the same, they would have the same impact on your lending capacity.

There are way to many factors to list here but the impact on your net income and what you have left is whats key.

An applicant on £100k a year probably wouldn't see their loan amount change at all if they had a £500pm loan.

Someone on £20k certainly would.