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How much can I borrow?
If you need advice on how much you can borrow, give us a call or
make use of the following rules of thumb:
Mortgage tips
- Don’t assume mortgage payments will be easier in future
years. When inflation was high (8-10%), house prices and salaries
rose and so mortgage payments became a lower percentage of salary.
However, we now have low inflation and so the percentage of salary
that your payments make up will only reduce significantly if your
salary increases significantly because of performance or promotion
– rather than inflation.
- As a rule of thumb you can typically borrow 4 times your
gross regular income. For joint applications the rule is 3.5 times
the combined income, or three times the highest income plus the
other income. The higher of these two calculations will count.
- If your income will be higher in the future, you may want the
initial monthly payments to be as low as possible. Look for mortgages
with discounted rate offers, long discounted rate periods, and
a long loan period.
- If you want to know the mortgage will be paid back fully at
the end of the mortgage term rather than planning for an excess
lump sum at the end of the term, look for repayment, or full with
profits endowment mortgage. Full with profit endowment loans are
the only interest-only mortgages that guarantee the loan is fully
repaid provided all repayments are made.
- If you want the total amount of interest paid over the mortgage
term to be as low as possible, look for mortgages with a shorter
loan period. Although monthly payments will be higher, a shorter
loan period reduces the total interest you pay. Also look for
lenders with low standard variable rates. If you believe interest
rates will increase, look for mortgages with a long fixed rate
period as well.
- If you want to know exactly how much your monthly payments will
be for the next few years, look for mortgages with fixed rates,
a fixed rate period right for you, and competitive standard variable
rates after the fixed rate period is over.
- Deposits: For a self-certification mortgage, where you guarantee
your own income, you may need to pay a minimum deposit of between
15-25%.
Ready to apply?
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Special Features
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Emergency Mortgages:
need a mortgage fast, call 0800 3898361
9am to 9pm.
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