Mortgage calculator

Mortgage questions

How much can I borrow for a mortgage?

Most UK lenders cap borrowing at around 4 to 4.5 times household income, reduced by existing credit commitments. Some lenders stretch to 5.5 times for higher earners or professional schemes. Your deposit is added on top to give the maximum property price.

How is a monthly mortgage repayment calculated?

A repayment mortgage uses the annuity formula: the loan amount, the monthly interest rate and the number of monthly payments over the term. Each payment covers interest first, with the remainder reducing the balance, so early payments are mostly interest.

What deposit do I need to buy a house in the UK?

5% is the usual minimum, 10% widens your choice of deals, and 20% or more typically unlocks the lowest rates because the loan to value falls below 80%.

Does a longer mortgage term cost more?

It lowers the monthly payment but increases total interest. Stretching a 25-year term to 35 years can cut the monthly cost noticeably while adding tens of thousands of pounds over the life of the loan.

Is interest-only cheaper?

The monthly payment is lower because you only pay interest, but the full balance is still owed at the end of the term. Lenders require a credible repayment plan, so it is mainly used for buy-to-let.