How much can I borrow
New mortgage lending rules have affected the way lenders review mortgage applications. The affordability of the mortgage will now be the lenders’ priority, and to assess affordability lenders will often request the following for an application.
- Details of your employment
- Your income
- Your monthly outgoings
If you need a £300,000 mortgage, find our mortgage table above that shows the best mortgage deals available.
How to calculate mortgage repayments
One of the main factors when deciding whether to take out a mortgage is the size of the mortgage repayments.
To find out how much you may pay each month, use our mortgage calculator.
Simply input the following information into the corresponding fields of the mortgage calculator:
- The purpose of your mortgage
- The value of the property
- The amount you wish to borrow
- The type of mortgage you want
- Your preference on capital and interest or interest only mortgage
- The length of mortgage
Once all the necessary information has been entered, the mortgage calculator will find all the mortgage deals available to you.
What is a fixed rate mortgage
The majority of high street banks offer fixed rate mortgages. These mortgages provide the opportunity to secure a set interest rate for an introductory period. The fixed rate period will normally be for 2,3,5 or 10 years.
Before agreeing to take out a fixed rate mortgage, you need to remember that the interest rate you secure at the start of your fixed rate term may not be as competitive by the end of your fixed rate term. This is because interest rates change over time, and there is no way of knowing exactly what interest rates will look like in the future.
What is a tracker rate mortgage
A tracker mortgage is a type of mortgage with a variable interest rate. Tracker mortgages’ interest rates are determined by the Bank of England’s base interest rate. Therefore, if the Bank of England raised their base interest rate, then tracker mortgages’ interest rates would follow suit.
Repayment or interest only
If you want to get a mortgage that allows you to own a property outright at the end of the mortgage, then you might want to take out a repayment mortgage. Typically, repayment mortgages have relatively high monthly payments, as they require you to pay both the capital and the interest on your mortgage.
If you are more concerned about just getting on the property ladder, then you might want an interest only mortgage. Generally, interest only mortgages have smaller monthly payments. This is because you only have to pay the interest on the mortgage.
Making overpayments on your mortgage might be appealing because it can allow you to repay your mortgage faster. Some lenders on the high street are flexible and allow you to make as many overpayments as you like. However, there are some lenders that prohibit overpayments, and they will levy large early repayment charges if overpayments are made. Therefore, before you make any overpayment on your mortgage you should always check with your mortgage provider.