Mortgage calculator

The exact amount of interest you’ll pay depends on the mortgage rate you’re on. This can change over time. For example, you might be on a low rate now, but if interest rates rise you could end up paying a higher interest rate when you come to remortgage, or if you move onto your lender’s standard variable rate.

The cost of your monthly repayments depends on various factors, including the type of mortgage you’ve taken out, whether you have an interest only or repayment mortgage, how long you’ve borrowed it over and the rate you are on. Typically, your repayments will be lower with an interest only mortgage, as you’re only paying back the interest rather than the total amount borrowed but you will need to factor in the cost of making sure you have enough set aside to repay the mortgage at the end of the term. With a fixed rate mortgage your monthly payments will remain the same for the term of your mortgage, but with a variable rate deal, they may change over time depending on interest rates. The amount you pay back monthly also depends on the length of your mortgage term. If you’ve chosen a 5 year repayment mortgage, your payments will be much higher than a 20 year one, for example.

Mortgage payments have two separate parts: the total amount you’ve borrowed (the capital) and the interest charged on your loan. If you have a repayment mortgage, your monthly payments will cover both of these parts, with a portion of your monthly payment going towards the capital, and the other part covering the interest on your debt. With an interest only mortgage you are only covering the interest with your mortgage payments so the amount you owe is not reducing each month. So in summary your mortgage payments are calculated based on the amount borrowed, the term of your mortgage, the type of mortgage you’ve chosen, and the interest rate. When you take out a mortgage through L&C, we’ll take you through the options and ensure you understand exactly how much you’ll have to pay back every month.

There’s no need to be worried about the mortgage underwriting process - you just need to know what it involves, so you can be prepared for it.

You’ll be asked to provide proof of your income, usually payslips for the last three months, as well as any other income you receive such as benefits, part-time jobs or child maintenance payments.

Getting a mortgage as a self-employed person needn’t be a struggle as long as you can provide proof of your income for the last two full tax years. Typically lenders will ask for 2 years’ accounts or tax returns to demonstrate how much you earn, although some lenders may consider one year’s accounts depending on your situation.

You’ll also need to show your outgoings in the same way as an employed applicant, including things like credit commitments, Council Tax and energy bills. If you’re looking for a self-employed mortgage loan, it’s worth making sure your accounts and tax returns are up to date as soon as possible.

Regardless of your employment status you can also expect your lender to look into your credit history, and any bad credit, late payments or outstanding loans could have an impact on the amount you’re able to borrow.

The process for affordability checks can take anywhere from two to six weeks, but you can minimise delays and ensure that you provide the correct paperwork by applying through a mortgage broker like L&C. We can also help to find the best match for your circumstances, including self-employed mortgage lenders.

To ensure you have the best possible chance of obtaining mortgage approval, make sure that you check your credit report before starting the mortgage application process. When reviewing your report, which can be done for free via credit reference agencies like Experian, make sure there’s no incorrect information, as any discrepancies could affect your mortgage application.

You should also try and save as big a deposit as possible, but if you are a first time buyer or finding it difficult to save up enough for a big deposit, there are options available to you. You could look at schemes like shared ownership or shared equity, or a guarantor mortgage where a family member agrees to meet your monthly repayments if you can’t. Use our mortgage loan calculator to work out how much you might need to borrow and what deposit you need to save.

To figure out how much deposit you need it’s helpful to know what ‘loan to value’ (LTV) means, so the size of mortgage in relation to the value of the home you want to buy. The lower your LTV, the wider range of mortgages are available to you. Use our LTV calculator to work out your loan to value and find out which mortgages are available to you.

If you’re buying a property that needs renovation, you might be wondering whether you can take out an additional amount on your mortgage to cover the work that needs to be done. Unfortunately, lenders base their mortgage offers on lower of the purchase price or current value of the property. If you have a large deposit you may be able to hold some of that back to carry out the work and borrow more on your mortgage, but generally lenders will not lend more than 90-95% of the current value.

All lenders will do an affordability assessment before offering you a mortgage and it’s calculated using a variety of different factors. Firstly, a lender will look at your income - and if you’re buying with someone else, they will also take their income into account, as well as your outgoings to make sure that you can afford the monthly repayments. This includes things like your credit card and loan payments, bills, child care costs, groceries and personal/leisure spending. Lenders also look to understand whether you’ll be able to keep up payments if your mortgage interest rate increases.