What type of mortgage calculator is this?

There are many different types of online mortgage calculator, with varying functionality. This is an affordability calculator, which is probably the most common type seen online. It shows how much you can borrow based on your deposit and income, but doesn't allow you to look at how different rates, terms or types of mortgage (for example an interest-only mortgage) would change these outcomes. Our calculator is quick and free to use and only requires minimum information on your part. This is a great tool for those starting their home ownership journey, but should only be used as guidance.

How to use our mortgage calculator

A mortgage calculator like this can be helpful when you're researching how much you can borrow to buy your new home and what it may cost to repay, especially if you're a first-time buyer. You can gauge a rough estimate of the total amount you might be able to borrow to buy a home or investment property, based on how much deposit you currently have and your annual income. For buy-to-let mortgages, it also shows how much monthly rent you'd likely need to obtain from the investment property - lenders typically look for you to charge at least 125% of your monthly mortgage repayment. The results will also show you what your monthly mortgage payments are likely to be for a property of that value, and this is calculated using the current average rate of interest we've seen at that LTV (Loan-to-value) over the past 3 months. It's also necessary to use a fixed LTV and term length to establish this figure (see small print below calculator). This means that it should only be used as an approximation of your total potential loan size and repayments.

Do mortgage calculators perform credit checks?

Our calculator does not perform a credit check. It doesn't ask for any personally identifying information, such as your name, so this would be impossible.Even when you choose our downloadable mortgage in principle (MIP) you won't be submitted to a full credit check, this only tends to happen when you submit a formal mortgage application. The type of credit check performed to produce the MIP is called a ‘soft search' and this type of credit check leaves no mark on your credit file.

Why it's important to speak to a broker after using the mortgage calculator

Keep in mind that as well as the fixed information that online mortgage calculators use, such as LTV and term length, they also only perform the calculation based on the information you enter. They won't take any of your personal circumstances into account. So, for example, although you enter your income, your total outgoings or credit history won't be considered. Neither will your employment type or the type of property you plan to buy. All of these elements can impact not only the size of your loan, but the rates available to you. As an online mortgage broker, your mortgage advisor can review these details for you during a simple phone call, and give you a much more in-depth understanding of what you could expect to borrow, the rates available to you, and how much your monthly repayments would be.

How much can I borrow?

Although most banks and mortgage lender websites tend to have their own on-site mortgage calculator, they also each have their own set of criteria, which will determine how much you can actually borrow.The main factors that most lenders look at when deciding how much you can borrow for your mortgage are:

• Income and outgoings - affordability is typically based on a multiple of your income

• Deposit size

• Credit history

• Employment type and status - certain professionals may be able to borrow more

• DTI - debt to income ratio (or the percentage of debt you have compared to your overall income)

• The type of mortgage and interest rate you select

• Property type

Lenders typically look at more extensive criteria when calculating how much to lend on a buy-to-let mortgage. More information can be found in the linked guide.

About your calculation

Your maximum property value is based on a Loan to Value (LTV) of 95% if a residential mortgage and 75% if a Buy to Let mortgage.* The estimated monthly cost assumes a 25 year overall mortgage term on a repayment basis and the average interest rate we’ve seen for the LTV above over the last three months (5.58% Residential / 5.34% Buy to Let). The initial rate is generally lower if you can find a bigger deposit or you look at a lower valued property as you will have a lower loan to value (LTV). The lowest initial rate seen in the last three months was 2.73% for Residential and 3.54% for BTL.The exact amount you can borrow will depend on your specific circumstances and requirements, plus individual mortgage lender borrowing criteria. For Buy to Let mortgages, the actual cost and deals available can also be influenced by factors such as whether you are a private or limited company landlord, the property being occupied by multiple tenants (HMO), having a minimum annual income, the total number of BTL properties you own/have.The estimated rent needed will vary based on the tax banding of the applicant(s). These calculations don’t include the many other fees that will apply when buying a property, such as arrangement fees, valuations, conveyancing, surveys, stamp duty tax and more.As a mortgage is secured against your home/property it may be repossessed if you do not keep up the mortgage repayments.