Most lenders cap the amount you can borrow at just under five times your yearly wage. For you, this is x .
Depending on a few personal circumstances, you could get a mortgage between x and x.
As long as you’ve got a 10% deposit, a clear credit history and no large debts or expenses, you should have no problem getting a mortgage of up to x.
Borrowing x over x years could mean a monthly repayment of x - x
Banks and building societies mostly use your income to decide how much they can lend you for a mortgage. For this reason, our calculator uses your income too. Things like your deposit and credit rating will also be factors, so remember, our calculation is only a rough idea of what you could borrow. Read our guide to eligibility
Use our repayments calculator to see how much your monthly mortgage repayment could be.
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While our calculator will give you a rough idea of how much money you could take out for a mortgage, there are other aspects to keep in mind. In fact, lenders will want to know how you spend your finances as part of an affordability assessment.
The key things they'll look at are...
Credit score and history. This gives them an indication of how you manage your money and pay your bills, as well as help them understand if you'd be a reliable borrower.
Personal income. Lenders will also need to know the amount you earn. With this information at hand, including any bonuses and tax credits, they’ll be able to offer you a mortgage that suits your needs and pocket.
Your outgoings. Mortgage providers scrutinise how much of your monthly income you spend to evaluate the size of your deposit and how it was accumulated.
There is no universal answer to this question, as it will depend entirely on your own financial situation. However, it’s always wise to borrow an amount of money that you can comfortably pay back, without having to struggle or stress in a few months’ time.
With our mortgage calculator, you can get a good idea of how your monthly repayments could affect your budget. Our calculator will show you what you can expect to pay back each month based on the value of your house, deposit, and interest rates.
When taking out a significant loan, it’s important to think about what may happen in the near future. With the UK’s current economic situation, you may have to deal with an array of increased expenses. So make sure to bear all these factors into consideration. Also, don’t forget that – on top of your mortgage costs – you’ll have to cover admin fees and possibly stamp duty.
That said, do what feels right for you. MoneySuperMarket is always happy to help and support you with this crucial decision in your life.
Again, there is no right or wrong answer. However, it’s fair to say that with a larger deposit, you’ll need to borrow less money and will benefit from more favourable interest rates further down the line.
In this respect, lenders will keep a close eye on your loan-to-value ratio (LTV). LTV indicates the percentage of the property’s price that will be covered by the mortgage. So, if your property’s value stands at £300,000 and you have a 10% deposit (£30,000), your LTV will be 90%.
Some lenders will offer a wide range of options, including 95% or even 100% mortgages. But generally, the higher the deposit, the lower your LTV and interest rates, meaning that you’ll have to give back more manageable monthly repayments.
Therefore, you may want to check if increasing your deposit – even if only by a few thousand pounds – could alleviate your repayments and get you a cheaper interest rate.
Determining how much to borrow might be trickier for those who are self-employed. This is because you don’t have a fixed salary that you take home every month.
If you’re using our mortgage calculator, think about what your annual wage could realistically add up to. This way, you’ll have an initial idea of how much you could afford to borrow, including the possible cost of future repayments.
You may also want to use a mortgage broker, as they’re more likely to know what mortgage providers are looking for. Based on this, you’ll be able to identify those lenders who are more inclined towards lending money to self-employed homebuyers.
Fixed-rate mortgage – These feature an interest rate that remains the same for a set period. Generally, it's between two to five years, but you can also find fixed-term options of up to ten years or more. The advantage of fixing is that you’ll know how much you'll be paying each month and won’t have to worry about any rise in interest rates.
Variable-rate mortgage – With variable-rate mortgages, your monthly costs could change throughout your loan term. This is because your interest rate changes in line with the Bank of England’s base rate. For standard variable-rate (SVR) mortgages, each lender has an SVR that they can move when they like. SVRs can be anything from two to five percentage points above the base rate (or higher) and they can vary massively between lenders.
Discount mortgage – Rather than being linked to the Bank of England’s base rate, discount mortgages 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%. Bear in mind that SVR changes are always at the lender’s discretion, meaning that your repayments could vary even if there has been no change to the Bank of England’s base rate.
If the mortgage results on our calculator are lower than you hoped for, don’t feel discouraged.
As mentioned, our mortgage calculator is only here to give you a rough indication of what you can expect to borrow. But more importantly, there are different ways in which you can find a way to gain a bigger mortgage.
Firstly, try saving up for a larger deposit. For instance, if a lender is only willing to offer you 80% of the property’s total price, you’ll need a deposit that can cover 20% of the house’s full cost. For the time being, you could spend less on entertainment and non-essential expenses. You may also want to consider living in shared accommodation with friends or moving back in with your family.
Alternatively, if you’re not able to save enough money, you could opt for a guarantor mortgage. This means you’ll need to find a guarantor, usually a parent or guardian, who will be responsible for payment of the mortgage if you are unable to cover the costs yourself.
What’s more, you could also speak to a broker, as they are bound to know which mortgage provider is likely to lend you a bigger mortgage than others.
At MoneySuperMarket, we compare mortgage products from over 90 lenders to bring you the best deals on the market. Just tell us a bit about yourself, your plans, and your property, and we’ll help you find the best solution for your pockets and needs.
By using our own mortgage calculator, you can gain an initial idea of how much you could borrow to purchase the house of your dreams.