How much can you borrow?
Our mortgage calculator shows you how much you could borrow based on your income
1Annual saving based on re-mortgaging £205,335 from the highest big 6 lender standard variable rate at 7.49% to a 5 year fixed rate of 3.94%. LTV 50%, less fees (£999). Details correct as at 24th February 2023.
Your home is at risk if you do not keep up repayments on a mortgage or other loan secured on it.
This is when you already have a mortgage for your property and you switch to a new deal, often with a new lender. Remortgaging could help you save money by getting a lower interest rate and better terms.
As a first-time buyer, you may have a smaller cash deposit to put towards your purchase. You might also want to do more research into the different types of loans, including fixed and tracker rates, to see which is the best type for your needs.
A buy-to-let mortgage is designed specifically for people looking to purchase property as an investment, rather than as somewhere to live. If you’re buying a house or flat and intend to rent it out to tenants, you need a buy-to-let mortgage.
95% Mortgage Scheme
The government announced a 95% mortgage guarantee scheme in the 2021 Spring Budget. This enables homebuyers to secure a mortgage with a 5% cash deposit, with the government underwriting 95%-mortgage loans.
The scheme is available to all homebuyers on properties worth up to £600,000. Most major lenders are participating.
First Homes Scheme
The First Homes scheme is a government initiative to boost affordable housing. Under the plan, eligible new homes will be made available at a 30% discount to their market price for first-time buyers. Key workers and army veterans will be prioritised.
The discount must be passed on to future buyers when the property is sold.
Our mortgage calculator shows you how much you could borrow based on your income
Work out the cost of your mortgage and the predicted cost of your monthly repayments
See how much your mortgage payments will be affected by a Bank of England base rate change
Stamp duty is the tax you pay when you buy a property or land set as a percentage of the purchase price. The amount of tax you’ll pay in total depends on the value of the property you are buying, as well as whether you intend to live in it or rent it out.
In England and Northern Ireland, there is no stamp duty to pay on the first £250,000 of a property purchase you make for your personal use. If the property you’re buying is valued at £625,000 or less, this nil-rate band rises to £425,000 for first-time buyers.
Tax is applied at a tiered rate based on the value of your property above the nil-rate band. Stamp duty thresholds and levies are different in Scotland and Wales.
See what tax you might pay with our stamp duty calculator.
Fixed-rate mortgages have an interest rate that stays the same for a set period. It means repayments are the same every month, so you’re protected from any rise in interest rates. Deals are typically between two and five years, although it is possible to get a fixed term of 10 years or more.
A tracker mortgage will usually charge you an interest rate that follows the Bank of England base rate. However, it generally tracks a few percentage points higher. The base rate is the interest rate at which high street banks borrow money. As it goes up and down, your monthly repayments will rise and fall too.
A standard variable rate (SVR) is an interest rate set by your lender, usually a few percentage points above the Bank of England base rate. If you are on an SVR mortgage, you’re probably paying more than you need. Switching to a fixed- or tracker-rate deal can usually save you money and there shouldn’t be an early repayment charge.
A discounted variable-rate mortgage is similar to a tracker mortgage. But rather than being linked to the Bank of England base rate, it’s linked to your lender’s standard variable rate (SVR). A discounted variable-rate mortgage will be set at a fixed percentage below your lender’s SVR. The SVR can change at your lender’s discretion and your monthly repayments will go up and down as a result.
An interest-only mortgage allows you to pay just the interest charged on the loan each month. You don’t have to repay the amount you’ve borrowed, which is sometimes known as the ‘capital’, until the end of the term. This means your monthly payments will be less than on a repayment mortgage. However, you must make provisions to repay the original loan.
An offset mortgage lets you use your savings against the amount you owe on your mortgage, reducing how much interest you pay. The value of your savings is deducted from your outstanding mortgage balance, so you pay interest on the remainder. Offsets work well if you pay more in mortgage interest than you earn in a savings account.
Consider any fees attached to the mortgage deal, as these can add considerably to the overall cost. Also, factor in the length of the initial term – there is likely to be an early repayment charge if you want to leave early.
Check your credit report before applying for a new mortgage. This can have a big impact on what mortgage rates and deals you’ll be offered. You can also take steps to improve your rating where possible, such as getting on the electoral roll.
It is possible to get a mortgage with bad credit, but it depends on your circumstances. Bear in mind, though, that you may not be offered the most competitive rates.
Lenders will make mortgage decisions based on your credit report. So, any repayment problems or county court judgments (CCJs) you’ve had could work against you.
Check your credit score for free with our credit monitor service, so you know where you stand. There could be some easy steps you can take to improve your credit rating, such as closing unused accounts and registering on the electoral role.
There are mortgages, known as ‘sub-prime’, specifically designed for borrowers with a low credit rating. They work in the same way as standard mortgages, but you’re likely to need a larger cash deposit and may face higher interest rates.
Tell us whether you’re looking to buy or remortgage and whether you’ll use the property to live in or rent out to tenants
Let us know an estimate of the property value, your deposit, the length of your desired term, and how you want to repay
We sift through mortgage deals from our leading panel of providers. This way, you can see what's on offer and make an informed choice
A mortgage is usually the biggest financial commitment you will ever make and it pays for one of the most important things you will ever buy – your home. When you’re borrowing that much, taking the time to find the very best deal can save you thousands of pounds so it is really worth taking time to do your research, compare mortgages and find the right mortgage for you."
A mortgage is a type of loan you get from a bank or building society to help buy a property. The size of the mortgage you need for a property will depend on how much you’ve saved up to put towards a deposit and the amount you still need to reach the purchase price.
The amount of mortgage you then take out will be a percentage of the purchase price. This is called a loan-to-value ratio, or LTV.
A loan-to-value (LTV) ratio is used to indicate how much of your new property is paid for by your mortgage (in percentage). You can calculate this by subtracting your deposit as a percentage from the house’s total price value.
For instance, if you’re purchasing a property that is valued at £200,000 and you’ve already paid a deposit of £50,000, you will be left with a 75% LTV. This is because your deposit is worth one-fourth (25%) of the house’s total price.
Generally, a larger LTV will come with higher interest rates as there’s more risk to the lender. Instead, paying a bigger deposit or buying a cheaper property in relation to your finances, is likely to get you a more favourable mortgage rate.
You can apply for a mortgage through a bank or building society. You’ll need a few documents on hand to start the process, including proof of identity, utility bills, and bank statements.
When you apply, you’ll be asked a series of questions about yourself and your finances. This is so the lender can calculate what kind of mortgage you’ll be able to afford. Your potential lender will also run checks to determine your financial status and credit history. If your application is accepted, you’ll be sent a mortgage offer.
It's easier and quicker to find the best mortgage for you when you compare quotes with MoneySuperMarket. Just tell us about yourself and the home you want to purchase. You can compare deals by the initial interest rate, APR, and the fees included in the overall mortgage term.
The size of the mortgage you can afford is based on your income and any financial commitments you already have.
You can find out how much you could borrow with our mortgage calculator. Simply enter your annual income and we’ll do the rest.
Whether a lender will let you borrow this amount will also depend on your credit history, the size of your cash deposit, and the length of the mortgage term.
This is the rate of interest charged on a mortgage. Rates are determined by the lender in most cases. They can be fixed, where they remain the same for the term of the mortgage, or variable, where they fluctuate with a benchmark interest rate.
Before you compare mortgage rates, it’s important to understand the different types and how they work.
Mortgage term: most people opt for a 25-year term for their first mortgage, but you can choose a longer or shorter period. If you opt for a longer term, your repayments will be lower. However, it will take you longer to pay off the debt and you’ll pay more interest overall. The shorter the term, the sooner you'll be mortgage free, but you should make sure you can meet the repayments each month.
Deal length: given that many mortgage deals have an early repayment charge (ERC) if you want to end the mortgage deal early, it’s important to think about how long you’re happy to tie yourself in for.
For example, if you think you might move in the next few years, opting for a two-year deal rather than a five-year deal might be preferable. It can cost thousands of pounds to get out of a mortgage early, as the penalty is usually a percentage of the outstanding mortgage. So, if your mortgage if £100,000 and the ERC is 2%, you’ll have to pay £2,000 to get out of the deal.
Repayment or interest-only: you can take your mortgage out on a repayment or interest-only basis. With a repayment mortgage, your monthly payments are calculated, so you’re paying off some of the capital as well as the interest. This way, you can be confident you’ll have repaid the entire loan by the end of the term.
In contrast, monthly payments on an interest-only mortgage cover only the interest. This means you'll have the original loan to pay in full at the end of the term. The idea is that you’ll have a repayment plan in place, such as an investment or cash ISA. Therefore, you’ll build up a significant lump sum to clear your mortgage loan in full by the time your mortgage ends.
This is a specific type of mortgage where another homeowner – generally a family member or close friend – agrees to cover for your mortgage expenses should you not be able to yourself. Guarantor mortgages are particularly useful in the case of first-time buyers, as they’re likely to have a limited deposit and a poor credit history.
That said, these mortgages come with a huge dose of financial responsibility for both you and your guarantor. If you’re both unable to meet your mortgage repayments, you could put your homes at risk.
Therefore, it's important to ensure that you can afford this type of solution. Bear in mind that guarantor mortgages usually don’t offer the best mortgage rates on the market.
A mortgage in principle or an agreement in principle is confirmation of how much a bank or building society is prepared to lend to you based on the information you’ve provided. This can help show that you’re ready to buy when it comes to making an offer on a property.
However, it’s important to remember that a mortgage in principle is not a guarantee that an offer will be made. A lender can still refuse or reduce the amount at the point you come to make a full mortgage application, as this will assess your full credit history and financial situation at the time of application.
It’s hard to definitively say who has the best mortgage rate, as that depends on what you’re looking for.
Banks and building societies change their mortgage rates quite frequently, so it’s always best to shop around when looking for the best deals. While low interest rates are attractive, they are not the only consideration. You should also factor in the type of deal you want, such as whether a fixed-rate or variable-rate mortgage will suit you best.
What’s more, think about the fees attached to the deal, plus how long you want to be tied into the loan.
APRC stands for annual percentage rate of change, and it’s expressed as a percentage. It shows you the total cost of your mortgage, including any fees or variable interest rates, over the entire term of the loan.
APRC is often used to advertise mortgages, as it helps give a more realistic idea of how much the mortgage will cost overall. It can come in handy when you’re comparing mortgages, as you can see how different rates and fees can impact the cost of your mortgage over its lifetime.
Our page APRC Explained goes into more detail.
Taking out a mortgage comes with an array of additional expenses. Here are a few you can expect to pay:
Arrangement fee – this is the standard fee you’ll have the pay lender to set up the mortgage
Booking fee – this ‘books’ your loan while you wait for your application to be processed and accepted
Valuation fee – this covers for checks to the property to ensure that it’s worth the sum of money you’re hoping to borrow
Conveyancing fees – this fee covers the legal costs associated with purchasing your new house
Broker fee – if you seek help from a mortgage advisor, some will ask for a payment for their service. The broker or advice fee is what you’d generally pay for mortgage advice
Fixed-rate mortgages have an interest rate that stays the same for a set period. This is generally between two and five years, although it is possible to get a fixed term of up to ten years or more.
Your repayments are the same every month, so you’re protected from rises in interest rates. Most will charge you a penalty, known as an ‘early repayment charge’ (ERC) if you choose to leave the deal before the end of the fixed term.
Interest rates adjust periodically with a variable-rate mortgage, which means repayments may change throughout the loan term. Usually, the interest rate changes in relation to another rate, which is the Bank of England's base rate. In fact, it has a big influence on variable interest rates, as does the base rate of each lender.
For standard variable-rate (SVR) mortgages, each lender has an SVR that they can move when they like. This often roughly follows the Bank of England's base rate movements. SVRs can be anything from two to five percentage points above the base rate (or higher) and they can vary massively between lenders.
The other type of variable mortgage is a discount mortgage. Rather than being linked to the Bank of England’s base rate, discounts are linked to the lender's standard variable rate (SVR). For example, if the SVR is 4.50% with a discount of 1%, the payable mortgage rate is 3.50%. If the SVR rose to 5.50%, the pay rate would rise to 4.50%.
The problem with discounts is that SVR changes are at the lender's discretion. Therefore, your mortgage payments could change even if there has been no change to the Bank of England’s base rate. What's more, even if the SVR changes following a move in the base rate, there is no guarantee that it will increase or decrease by the same amount.
As a result, trackers are usually seen as more transparent than discounted deals. They’re also often seen as being fairer for the borrower.
For example, when the base rate fell from 5.00% to 0.50% between October 2008 and March 2009, Lloyds TSB was the only top-20 lender to reduce its SVR by the full 4.50%. All the others cut their rates by less.
When the Bank of England raised the base rate from 0.25% to 0.5% in November 2017, anyone who wasn’t on a fixed-rate mortgage was at risk of seeing their repayments increase. Several leading mortgage lenders followed and increased their tracker and/or SVR rates a month later.
Most mortgage deals carry arrangement fees, which can vary from a few hundred pounds up to a couple of thousand.
Also, bear in mind that these set-up costs can sometimes be made up of two fees. An increasing number of lenders charge a non-refundable booking fee, which is effectively a product reservation fee. If your house purchase falls through and you don’t end up taking the mortgage deal, you won’t get this fee back.
The second type of fee is an arrangement fee, which you pay on completion of the mortgage. Therefore, you won't have to pay it if, for any reason, you don't take the mortgage.
Overpaying on your mortgage could help you to pay it off early and save money on interest payments. But make sure you read our mortgage overpayment guide first, as overpaying isn’t the right move for all homeowners.
You can calculate how early you could pay off your mortgage – plus how much this could save you in interest – with our mortgage overpayment calculator.
As you grow older, finding a mortgage that meets your needs and a lender's eligibility criteria can get increasingly challenging. This is why select lenders offer 'later life mortgages' aimed at those entering, or are already in, retirement age.
Beyond mortgages, equity release plans are another viable method of borrowing.
A halal home purchase plan (HPP), also known as an 'Islamic mortgage', is a financial product aimed at helping Muslims buy a house without needing to borrow money and bear interest.
These types of borrowing arrangements aren't currently offered through MoneySuperMarket, but our guide is a great source of information on different types of HPPs and who offers them in the UK.
Remember to always factor these into the overall cost of any deal. Even if a lender is offering a seemingly unbeatable rate, steep fees could mean that it works out to be more cost-effective to go for a higher rate, but with a much lower fee, or no fee at all.
The best mortgage rate for you depends on how much you are looking to borrow. A high fee is often worth paying in order to secure a low interest rate if you are applying for a large mortgage. But those with smaller mortgages could be better off opting for a higher rate and lower fee.
While this is the general rule, it is well worth crunching the numbers when you are comparing mortgages - you need to work out the total cost over the term of the deal. You can do this by finding out what the monthly payment will be using our mortgage repayment calculator – and then multiply by 12. You then need to add on the arrangement fee to find out the total cost.
You will likely find that you have more mortgage deals available to choose from if you have a good credit history. So it’s worth making sure that your credit report is as good as it can be before applying for a mortgage.
By paying off any outstanding borrowed credit and making sure your current address is on the electoral roll, you can help to improve your credit score.
The more money you can save as a deposit, the less you’ll need to borrow as a mortgage loan. Having a bigger deposit can help you get access to more competitive mortgage rates. Lenders will often have a maximum loan to value they’re prepared to offer you.
Using a mortgage comparison tool can help to give you a better idea of how much you’d need to pay in monthly costs and interest. It also allows you to identify the duration of the deal, the maximum LTV, and any product fees you may need to pay for the mortgage deals available based on your borrowing requirements.
It’s important to remember, though, that the actual mortgage deals you’re offered when you go to make an application may differ. This is because they will then be influenced by your financial situation and credit history.
So how do we make our money? In a nutshell, when you use us to buy a product, we get a reward from the company you’re buying from.
But you might have other questions. Do we provide access to all the companies operating in a given market? Do we have commercial relationships or ownership ties that might make us feature one company above another?
We commit to providing you with clear and informative answers on all points, so we have gathered the relevant information on this page.
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