Calculate how much you can borrow in the UK with our simple mortgage calculator. Calculate your monthly mortgage repayments to work out how much you could afford to borrow when moving house, remortgaging, or buying your first home.
The Mortgage Calculator Guide
Table of contents:
How much mortgage can I get?
Typically, individual mortgage applicants will be able to get four times their annual salary. Lenders historically used the 4x salary calculation to decide how much to lend but each lender has different lending criteria to manage the risk of lending.
If you are applying for a joint mortgage then both salaries will be taken into account, with some lenders being prepared to lend up to six times the joint income, or more.
Lenders will use your salary as the main determiner of how much to lend to you, as well as any other types of income such as cash benefits and car allowance. The amount they decide on will also depend on whether you are using a government scheme, how much deposit you have and your age.
Factors that determine how much you can borrow:
- Salary and any other income
- Deposit size
- Whether it is a government scheme
- Financial outgoings such as loans, living expenses etc.
- Length of mortgage
- Leasehold costs
How much mortgage can I afford - and what do mortgage calculators take into account?
Mortgage calculators do not take everything into account, they are simply to give you an idea of how much you should be able to borrow, assuming there are no significant factors that could affect the amount, such as bad credit history, for example.
The main details that are used in online calculators are:
- Salary (single or for each joint mortgage applicant)
- Any other income
- Mortgage type
- Mortgage length
- Interest rate
What do online calculators not take into account?
Many of the online calculators will not include details that lenders will use to decide how much to lend, such as:
- Your credit score
- Your monthly financial outgoings
- Interest rate changes
- The costs included in buying a house (stamp duty, solicitor’s fees, mortgage arrangement fee etc.)
- Changes to your circumstances (losing a job, getting ill etc.)
A mortgage calculator may give you an indication of what you might be able to borrow but a lender will do a much more thorough calculation, to make sure that they are confident that you will be able to repay your mortgage.
For example, if you have a monthly car loan to pay for three years, that will be taken into account in the calculation of how much you can afford to pay each month.
Can I get a mortgage with bad credit?
People with bad credit can often still get a mortgage but not all lenders will be prepared to approve a mortgage for someone with bad credit. It will depend on how bad the credit history is and whether the applicant’s credit rating is improving and debts are reducing.
The longer ago that the issue, such as a missed payment is, the better chance you will have for being approved for a mortgage.
It will be harder for someone with a bankruptcy or CCJs on their credit file to get a mortgage, compared to someone who has missed the odd payment for a minor bill. There are a number of ways that you can improve your credit before you apply for a mortgage.
When you have bad credit, the lender may:
- Ask you to pay a larger deposit.
- Only be prepared to offer a mortgage with a higher interest rate.
Should I borrow the maximum mortgage amount?
While the lender will provide you with the maximum amount you can borrow, it does not mean that you should necessarily borrow the full amount. If you find a property that you like that is a lower value, then taking out a smaller mortgage should mean you can pay your mortgage off quicker.
You should consider how much you think you can afford to pay each month and think about if your circumstances were to change, or if you needed to pay for an expensive repair, would you struggle to pay your mortgage?
When you are deciding how much to borrow, remember that you will be required to repay the mortgage for the length of term, which could be 25, 30 or 35 years, so you should remember how big the financial commitment is. Borrowing less can mean you are less likely to struggle to make payments, or that you can afford more holidays or other expenses.
Can I borrow with no deposit?
The majority of lenders will require a deposit of at least 10%, although a new government scheme has been launched that only requires a 5% deposit. There are some lenders that will provide 100% mortgages (i.e. no deposit required at all) but usually only if there is a guarantor who will legally be required to pay any missed mortgage payments.
Some lenders have a Lend a Hand Mortgage where a family member puts 10% of the purchase price into a 3-year fixed term savings account. Once the three years are complete and all payments have been made on the mortgage, the relative is paid back their money, so there are some alternatives if you only have a small deposit or no deposit.
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