How much can I borrow

New rules have affected the way mortgage lenders consider mortgage applications. With a stronger emphasis on the affordability of the mortgage, lenders will require details of the following to support an application:

• Your credit history
• Details of your previous employment
• Proof of your income
• Your monthly outgoings

If you receive a pension and need a mortgage, find out what you could borrow with the mortgage table above.

How to calculate mortgage repayments

When receiving a pension, it is important to know exactly what you will have to pay for your mortgage

By completing our mortgage calculator with the following information, you can identify the best mortgage for your set of circumstances:

• 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

Once you have entered the correct information, the calculator will give you a list of the mortgages available to you.

What is a fixed rate mortgage

If you want to know exactly how much you will have to pay each month for a set period of time, you may want to explore your fixed rate mortgage options.

By taking out a fixed rate mortgage, you could secure a set interest rate on your mortgage for a number of years. The majority of banks offer fixed rate mortgages for 2,3,5 or 10 years.

You may want to remember that interest rates are liable to change over time; therefore, an attractive interest rate today may not look too good in the near future.  If you want a fixed rate mortgage, you should always consider that you may be tying yourself up to an interest rate that may not be favourable in the near future.

What is a tracker rate mortgage

If you are confident that the Bank of England will not raise their base interest rate in the near future, you may want to take out a tracker mortgage. Tracker mortgages’ interest rates are closely linked to the Bank of England’s base rate; when the base rate increases so do tracker mortgages’ interest rates.

Repayment or interest only

Repayment mortgages are mortgages that require you to pay both the capital and the interest of a mortgage each month. These mortgages are usually more expensive, but allow you to own the property at the end of the mortgage.

With an interest only mortgage, you only need to pay the interest of your mortgage each month. This often means that the monthly mortgage payments are cheaper than other mortgages, but it also means you will not own the property at the end of the mortgage.

Making overpayments

Making overpayments is a sure-fire way of significantly reducing the amount remaining on your mortgage. Some lenders are flexible with overpayments, whilst other lenders do not allow you to make overpayments; these lenders will often charge an early repayment penalty to those who overpay their mortgage.

If you want to explore your mortgage options, it is a good idea to speak to an independent mortgage broker who will be able to offer impartial advice.