Mortgage calculator: How big a mortgage can I get? How to work out how much you could have

Buying a home is probably the biggest purchase you will never make, and a mortgage is a loan to help you buy it. Lenders will need to see proof of your income and certain expenditure, as well as look into whether you have any debts. How big a mortgage can I get?

How big a mortgage can I get?

If you stretch yourself, you won’t be able to keep up your repayments and the lender can repossess your home and sell it.

When shopping for a house, you need to think about how much it costs to run a home on top of paying your mortgage.

You must consider household bills, council tax, insurance, and maintenance to name a few.

A lender will refuse your offer if they don’t think you will be able to afford it, taking into consideration your financial record.

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The best way to find out how much you can borrow is to use a mortgage calculator.

There are plenty of free mortgage calculators online that will do the trick, such as the Money Saving Expert mortgage calculator.

Most bank websites will also have a mortgage calculator and guide available for free.

The calculation is too complex for most people to do alone, so stick to a calculator.

The Money Saving Expert calculator is based on a simple income multiple, but the sum needed is more detailed.

Although the calculator offers excellent guidance, the result a lender comes up with may differ.

The result of an online calculator should be taken as a general indication of costs.

Always get a specific quote from the lender and double-check the price before acting on the information.

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To use an online mortgage calculator, you will need to enter how many people are applying for the mortgage.

It will also ask you for each applicant’s annual income pre-tax, and if they get a guaranteed bonus or overtime.

You will then be taken to the results page which will tell you what the typical upper range of mortgage you can get is.

It also tells you how much you would need to be paying per month, and how much this is out of your pre-tax income.

Lenders will typically cap your loan-to-income ratio at around four and a half times your annual salary, which is the upper limit.

The calculator assumes you don’t have any debt and have a clear credit rating, so the mortgage you secure may differ from the result you are given in this respect.

A useful tip for those a few months away from applying for a mortgage is to budget as if you are already paying mortgage payments.

This will show lenders you can afford to repay by the month.

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