Mortgage Calculator | How Much Will My Home Cost? – Forbes Advisor UK – Forbes

February 11, 2022 By admin

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The Forbes Advisor editorial team is independent and objective. To help support our reporting work, and to continue our ability to provide this content for free to our readers, we receive payment from the companies that advertise on the Forbes Advisor site. This comes from two main sources.
First, we provide paid placements to advertisers to present their offers. The payments we receive for those placements affects how and where advertisers’ offers appear on the site. This site does not include all companies or products available within the market.
Second, we also include links to advertisers’ offers in some of our articles. These “affiliate links” may generate income for our site when you click on them. The compensation we receive from advertisers does not influence the recommendations or advice our editorial team provides in our articles or otherwise impact any of the editorial content on Forbes Advisor.
While we work hard to provide accurate and up to date information that we think you will find relevant, Forbes Advisor does not and cannot guarantee that any information provided is complete and makes no representations or warranties in connection thereto, nor to the accuracy or applicability thereof.
The comparison service on our site is provided by Runpath Regulated Services Limited on a non-advised basis. Forbes Advisor has selected Runpath Regulated Services Limited to compare a wide range of loans in a way designed to be the most helpful to the widest variety of readers.
With so many costs and variables at play, it can be difficult to budget when it comes to paying for a home.
A mortgage calculator can prove an indispensable tool when it comes to seeing what your monthly payments could look like against a range of different scenarios. 
Our mortgage calculator allows for monthly household bills too, so you’ll get a good indication of the entire costs of running a property.
You can find a step-by-step guide of how to use the calculator below. Bear in mind it applies to repayment mortgages only, where you pay both the capital and interest with each monthly payment.
1. Enter the property price and deposit (either as a percentage or flat amount). You’ll find this on the left of the screen. If you don’t have a specific property in mind, you can experiment with the numbers to see what you may be able to afford.
2. Enter the interest rate. Use a comparison website or contact a mortgage broker to find out what kind of rates are available for your deposit level. You may have a rate from a lender already through a mortgage ‘agreement in principle’.
3. Select a mortgage term. To calculate your monthly mortgage payment, input the term of the mortgage in years. A maximum of 30 years is available on our calculator but bear in mind the term you are offered will depend on your age and circumstances. 
4. Add in the cost of monthly household bills. If you want to see the full monthly cost of running your home, add in the cost of major bills, including council tax and broadband. If you’re not sure of these, the estate agent or local authority may be able to help.
5. Review your loan details. Now you’ve entered all the relevant information, the calculator will auto-populate your payment breakdown (on the right of the screen). You can see not only your monthly payments, but the estimated month and year by which you could pay off your mortgage if you continue to make them in full.  
If you want to see how much of your mortgage repayments goes towards the interest on the mortgage versus the capital (what you actually borrowed), click on the ‘Repayment schedule’ tab. You can toggle between the annual and monthly view to see a breakdown of each monthly payment.
Trussle is a 5-star Trustpilot rated online mortgage adviser that can help you find the right mortgage – and do all the hard work with the lender to secure it. *Your home may be repossessed if you do not keep up repayments on your mortgage.
A key factor when choosing a mortgage is your loan-to-value (LTV). Your LTV is the proportion of the property’s value you are borrowing as a mortgage. For example, if you buy a £200,000 property with a £20,000 (10%) deposit and £180,000 mortgage, your LTV will be 90%. 
Every mortgage product has a maximum LTV. Some are set as low as 60% – these will be the cheapest deals. First-time buyers typically borrow at LTVs of 90% or 95%.  In general, the lower your LTV, the lower the interest rate you’ll pay. You should only apply for a mortgage if you meet the LTV requirements.
The interest rate on a mortgage dictates how much it will cost you to borrow the money. The interest rate will either be fixed for a set amount of time, or variable. You may also have to pay an arrangement or booking fee to secure your mortgage, plus a lender’s valuation fee. These fees can vary between lenders and different mortgage deals.
You should also look at the early repayment charges (ERCs) attached to a mortgage deal. You will almost certainly have to pay ERCs for leaving a fixed rate mortgage before the fixed term ends.
The amount you can borrow as a mortgage largely depends on your income. Typically, mortgage lenders will lend you up to four times your annual salary. So, if you earn £50,000 a year, you’ll be able to borrow £200,000 as a mortgage. 
However, running alongside this the lender will also carry out an affordability assessment to examine any financial commitments you have such as childcare, outstanding loans, credit cards or debts.
With a traditional repayment mortgage, your monthly payments comprise of interest and some of the capital you owe. At the end of the mortgage term, you’ll have repaid your mortgage in full and own your property outright.
With an interest-only mortgage you just pay the interest on your home loan. This means your monthly payments will be lower. But at the end of the term, you’ll still owe the mortgage lender the amount of money you originally borrowed. 
You can lower your monthly mortgage payments by doing one or more of the following. Just bear in mind that, the last two are not ‘saving’ you money, but storing up your debt for the future.
The two main types of mortgage are fixed rate and variable rate. With a fixed rate mortgage the interest rate, and therefore your monthly payments, are fixed for a set amount of time. This is normally two, three or five years, but can be longer.
When the fixed rate period ends, you’ll normally be moved to your lender’s standard variable rate (SVR).
With a variable rate mortgage the interest rate can change. If it changes your monthly payments will either go up or down. There are different types of variable rate mortgage, including SVR mortgages, trackers, discount mortgages, and capped rate mortgages.
You can apply for a mortgage directly to the lender or via a mortgage broker or financial adviser.
To apply you’ll need to show picture identification, utility bills from your current address, and proof of your income.
If you’re employed, you can show your payslips and/or your latest P60. If you’re self-employed, you’ll need two or three years’ SA302 tax forms or certified accounts.
The lender will also want to see three to six months’ bank statements to carry out an affordability assessment. It will also carry out a credit check to see how you’ve handled credit in the past.
There’s no definitive rule about how long it takes to be approved for a mortgage, but it normally takes two to four weeks from application to mortgage offer.
During this time period the lender may ask you for more information – the quicker you can provide this, the sooner your mortgage will be approved.
Since the Covid pandemic, lenders may ask for extra information if you were furloughed or received help from the Self-Employment Income Support Scheme (SEISS).
Mortgage offers are usually valid for between three and six months. If you don’t complete on your purchase in this time period, you may be able to get the offer extended. If the mortgage offer can’t be extended, you’ll have to start the application process from scratch.

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