Using a Mortgage Calculator

If you are interested in getting on the property ladder or moving up, you will need to know how much you can borrow and if you can afford the monthly repayments. A mortgage calculator is a vital tool that will give you a guide to what you can afford before choosing a specific product or mortgage provider.

There is a variety of mortgage calculators available depending on how accurate you want your answers.

A basic calculator will give you a rough estimation on what you would pay each month depending on the loan amount, term and the interest rate. These provide a very general guide and should be followed up with a full calculation of costs before any commitment is made.

If you have found a few deals you are interested in and want to compare the options, a more complex calculator should be used. To use this calculator you need to know what the mortgage is for i.e. buy to let, remortgaging, first time buyer etc. You then need to decide what the value of the property you have found is and what your personal credit situation is i.e if you have a good credit history or have had CCJs or been declared bankrupt. Lastly, you need to enter some personal details and the calculator will give you a quotation and a recommendation.

Most lenders tend to have both forms of calculators on their websites for potential customers to use for free. The simple calculator should take less than 5 minutes to give you an estimate of what you can afford to borrow and repay. The more complex calculator will take up to 30 minutes and if you are happy to proceed the provider will give you an “offer in principle” based on the details you have provided.

The offer should detail what fees are involved but you should make an appointment with a mortgage advisor to understanding what the full terms of the mortgage offer are and if there are any other penalties or fees involved.