Getting the most out of a UK mortgage calculator
If you’re ready to buy a home and want to know how much you’ll be able to borrow, a mortgage calculator is a good first step to get you started.
We’re going to talk about how they work and how to get the best out of them, but if you can’t wait and want to get stuck in, CLS searches through over 30 lenders to show you a great range of potential mortgage options. Try our calculator now.
You’ll need to know:
- How many applicants are going on the mortgage
- The desired product length
- Your date of birth
- Your employment status and how long you’ve been in your current job
- Your salary or your earnings for the last 3 periods if you’re self-employed
- The property type and regional location
- If it’s a new build
- The property value
- How much you’re hoping to borrow
- If you need a new mortgage or are remortgaging
- Your preferred mortgage term
A mortgage calculator isn’t an offer or a guaranteed amount
The most important consideration buyers need to understand about mortgage calculators is that they provide an estimate of the mortgage amount someone with their status could achieve.
Because mortgage calculators only provide estimates, it’s crucial to understand the factors that affect those figures: your deposit amount and credit score, for example, and the variation in interest rates you’ll be offered also makes a significant difference.
The only way to get an accurate figure is to talk to a mortgage broker or lender.
They’ll assess your situation and provide you with far more detailed figures. Then, if you’re happy to move forward with them, they’ll provide a mortgage in principle certificate that estate agents and sellers will expect to see before making an offer.
How does a British mortgage calculator work?
All mortgage calculators are created differently; some will need your salary and mortgage term to project an estimate of how much you can borrow, and others might ask for your salary and deposit amount. The CLS Money mortgage calculator requests quite a few details so we can build a far more accurate figure of what’s likely to be available.
First-time buyers, for example, often benefit from introductory rates as long as they can achieve an appropriate deposit amount. Yet, those with recent credit issues or an unpredictable income could struggle to find a fair policy with rates they deserve. That’s why it’s always better to consult an expert.
Mortgage calculator (England) FAQs
What does my projected mortgage figure represent?
Mortgage calculators almost always show you the maximum amount you can borrow. They don’t take into account your credit score, your existing credit, or monthly outgoings—all factors that affect your final offer.
How much can I actually borrow?
Mortgage calculators work on a rate of around 4.5 times your annual salary. Your loan amount can be higher if you have additional income streams; it can also drop if you have a lot of existing debt or costly monthly expenses.
Depending on your circumstances and risk level, you may only achieve 2 or 3 times your salary figure. You might not even be accepted, although that’s unlikely if you use a good broker. They work with specialist lenders who lend to borrowers in unusual situations and circumstances.
Does age make a difference to how much I can borrow?
Mortgage terms are expected to conclude before the borrower reaches retirement age, as they’ll need an income that guarantees they’ll be able to make their payments over the full term.
However, being accepted for a mortgage after retirement is still quite possible with a suitable pension, savings, or investment scheme.
I’m self-employed, and my income fluctuates; will I be penalised when I apply for a mortgage?
Not at all—lenders appreciate that your income will vary, so they’ll need to see a little more proof of your average yearly income. It can be a bit more time-consuming during your application, but nothing you can’t handle. You run your own business, after all!
You’ll need to provide self-assessment tax returns for the previous few years, although some lenders may only ask for the most recent. If you don’t have a full year’s accounts, work contracts for that and the coming period might be enough proof for some lenders. But, as we say, a good broker will know the best lenders for you, tracking down the figures they need for the mortgage you want.
I have a large salary, but I'm getting low offers—why?
If you only have the minimum deposit (around 5%), you’ll still be seen as a risk and will be offered a lower loan or higher interest rates.
If you don’t have any deposit saved, there are schemes that can help, or you might have to ask a friend or family member to act as a guarantor.
I have a good deposit saved, but I'm getting low offers—why?
Saving up as much as possible as a deposit is a great move, but your mortgage will still depend on your salary, existing debt, and outgoings.
Do I need to borrow more to cover other expenses?
Great question. As well as the property price, you’ll also have to pay:
- Lender’s fees – Including possible booking, arrangement, valuation, and account fees).
- Legal fees – You'll need a solicitor to manage the sale and transfer.
- Survey fees – Home surveys start at around £400 but can save you thousands if there are any problems with the property.
- Bank charges – Some banks charge for the transfer to your solicitor, and your solicitor may even charge for sending the sum to the seller.
- Brokers fees – Brokers may charge a flat fee, or they might build their costs into the mortgage. Ultimately, their fee will likely save you time and money, so they offer high value.
- Agency fees – If you’re moving house and selling a property, you’ll also have to meet your agent’s selling fees.
- Stamp duty – Stamp duty applies to properties over £125k, from 2% to 12%, depending on the price.
All these figures add up; if you can afford to pay them out of your pocket, that’s one option. If you’d prefer, you can add them to your mortgage and pay for them over the mortgage term, but you’ll have that little bit less to spend on your new property.
Can I still get a mortgage with a bad credit score?
Yes. You won’t get quite as good a deal, but plenty of lenders are ready to help every type of buyer achieve a mortgage. There are many ways to improve a low credit score, so it’s a good idea to work on those as soon as you’re considering entering the property market.
What type of mortgage calculators are there?
Typical mortgage calculators estimate their loan amounts using different inputs. However, there are mortgage calculators of every type: affordability assessment calculators, mortgage term calculators, interest rate calculators, repayment amount calculators, remortgage calculators, overpayment calculators, buy-to-let calculators, commercial mortgage calculators, LTV (loan to value) calculators and more.
Narrow down your mortgage offers with CLS Money
If you need any advice or help understanding exactly how much you can borrow, call one of the expert advisors at CLS. We’ll walk you through all the stages and show you just how much you can expect to achieve in your position.
