How much can I borrow
The mortgage lending market has changed recently due to new rules that have affected the way mortgage lenders review their applications. Lenders now mainly focus on the affordability of the mortgage.
Although the criteria for a mortgage will vary from lender to lender, most lenders will require the following to support an application:
- Your credit history
- Details of your employment
- Proof of your income
- Your monthly outgoings
If you are over 65 and need a mortgage, find out what you could borrow with the mortgage table above.
How to calculate mortgage repayments
One of the major factors when deciding which mortgage to take out is the size of the repayments.
You can work out how much you will have to pay with our mortgage calculator. Simply enter the following information to find the best mortgages available:
- The purpose of your mortgage
- The value of the property
- The amount you wish to borrow
- The type of mortgage you want (either capital and interest or interest only mortgage)
- The length of mortgage
What is a fixed rate mortgage
Fixed rate mortgages provide interest rates that are set for the introductory period; this is usually for 2,3,5 or 10 years.
Fixed rate mortgages could give you peace of mind to know exactly how much you need to pay each month for the initial period.
Due to the changing nature of interest rates, it’s important to consider all the fixed rate options available to you. This is because a good interest rate today may not be the best interest rate mid-way through your fixed term.
Post Office are offering some great fixed rates on their mortgages.
What is a tracker rate mortgage
Tracker mortgages’ interest rates are heavily determined by the Bank of England’s base interest rate. This means that if the base rate increases, then so do the interest rates offered through tracker mortgages.
Repayment or interest only
If you want to keep your monthly mortgage payments down, then you may want an interest only mortgage. This type of mortgage only requires you to pay the interest on a mortgage, which may result in cheaper mortgage payments each month. It should be noted that you cannot own a property through an interest mortgage only.
Repayment mortgages often have higher monthly mortgage payments, as they require you to repay the capital and the interest of a mortgage. However, unlike interest only mortgages, repayment mortgages allow you to own the property at the end of the mortgage.
You can make substantial progress on your mortgage by making overpayments. Some lenders are more flexible in relation to overpayments, whereas other lenders will charge early repayment fees to those who overpay their mortgage. It is advisable to check with your mortgage provider before you make an overpayment on your mortgage.