How much can I borrow for a mortgage
Use our mortgage calculator to estimate how much you could borrow
The right mortgage isn’t quite as simple as choosing the deal with the best interest rate. The type of mortgage you need depends on your financial situation, your future plans and the type of property you’re looking to buy.
With a fixed rate mortgage, your repayments are guaranteed to stay the same for a set term, usually two or five years.
The advantage of a fixed interest rate is this security – knowing that your mortgage payments will stay the same for a certain length of time.
Fixed rates are sometimes higher than variable rates, but that’s not always the case.
The main disadvantage of them is that you won’t benefit from a reduction in costs if interest rates fall.
If you’re on a variable rate mortgage, your monthly payments can change, because your lender can change the rate of interest it charge you. That can make it more difficult to budget for.
Variable rate mortgages will generally change when the Bank of England changes its base rate.
Interest rates and fees for variable mortgage deals can sometimes be lower than for fixed rates.
There are a few different types of variable rate mortgages:
An offset mortgage links your savings to your mortgage and 'offsets' their value against the loan balance.
In practice, this means you'll pay less interest on your mortgage. For example, if you had a mortgage of £100,000 and savings of £20,000, you’d only pay interest on £80,000 of your mortgage.
But it also means your actual savings won't earn any interest and you might not have unrestricted access to your money.
An offset mortgage can make sense when mortgage rates are high or savings rates are very low.
Your mortgage lender will look at your affordability and decide how much you can borrow. It’ll base this decision on:
To get an estimate of your how much you could borrow and your repayments, try our mortgage calculator.
If you’re looking to buy a home, most lenders will expect you to have a deposit of at least 5%-10% of the property’s value.
A larger deposit will let you access better mortgage deals.
If you’re struggling to build a deposit, government schemes like Help to Buy and Right to Buy will help you to buy a home with a smaller deposit.
There are two different ways to pay for your mortgage – repayment or interest-only.
With a repayment mortgage, you’ll pay back what you’ve borrowed, plus any interest, over the term of your mortgage.
Each month, your mortgage will get a bit smaller, until you’ve repaid the whole loan. Then, you’ll own your home outright.
Interest rates are usually lower on a repayment mortgages than an interest-only mortgage,you’re your monthly repayments will be higher as you’re paying off the capital and the interest.
On an interest-only mortgage, you only pay the interest that builds up on your mortgage each month. You pay nothing towards the capital (the amount you borrowed). This will make your monthly repayments lower.
At the end of your mortgage term, you’ll need to repay the capital. You’ll need a plan for how you’ll do this – separate investments, or simply selling the property.
Interest-only loans are most common for buy-to-let mortgages and aren’t widely available for residential mortgages.
Get one step closer to your perfect mortgage deal by viewing a range of mortgages you’re eligible for before you apply. First, decide what type of mortgage you need.
First home mortgages are for those who have never owned or inherited residential property before.
You won’t qualify as a first-time buyer if you’ve ever owned a commercial property with living accommodation, or if you’re looking to buy a property with someone else who’s previously owned a home of their own.
These mortgages are suitable for those who are planning on or considering moving house.
Some mortgages can be taken with you your new home (known as ‘porting’). Just be aware that your credit score will be rechecked and there might be complications if the new property is worth significantly more or less than your current one.
If your current mortgage deal’s ending in less than six months or you’d like to see if you can save money on your existing repayments, you need a remortgage.
A remortgage deal might also be right for you if you want to borrow more money, or to switch to a repayment mortgage from interest only.
If your mortgage is for a property that you plan to rent out to tenants, you’ll need a buy-to-let mortgage.
Interest rates and fees are usually higher than residential mortgages, and you may need previous experience of being a landlord to be eligible.
Get your details together before you start, so we can find you the best deal. We’ll ask for things like:
Whether you’re a first-time buyer, moving to a new property or remortgaging your existing one
Your name, address, and whether you’re making a single or joint application
Whether it’s a new build, a house or a flat
Usually the value of the property you’re buying, minus your deposit. If you're not sure, you can give an estimate based on your budget
Your salary before tax, plus any extras like bonuses or overtime
Comparing mortgage deals isn’t the only way to find great rates. Here are five more tips to help you get the deal you want:
Lenders will check your credit history against their criteria when deciding how much to lend
A really simple but effective step towards improving your credit score
A bigger deposit means you won’t need to borrow as much and you’re likely to be offered better rates
Paying your bills regularly and on time will be reflected in your credit score and shows lenders you’re reliable
Use an eligibility checker to find out which mortgages you qualify for without affecting your credit score
It can take a while to build or repair your credit score. Mortgage lenders can check the last six years of your credit history, so it’s worth preparing early
Agreement in principle (AIiP) means that your lender is willing to lend you a specified amount, based on some basic checks on your income, spending and debts. It’s sometimes also called a mortgage in principle.
No, only a soft credit check is used for a mortgage in principle, so it shouldn’t leave a mark on your credit score. When you make a full mortgage application.
Most mortgage terms are between 15 and 35 years, but you can get terms for longer or shorter periods.
Yes, as long as a provider thinks you can afford it you might be able to get a mortgage if you’re on income-related benefits like Employment and Support Allowance, Income Support or Universal Credit.
Yes, you can. There are no legal reasons why you can’t make an offer on more than one house, but you might end up having both offers accepted which could leave you in the difficult position of having to withdraw one of your offers.
Most people can. If you have a stable income, enough savings for a deposit and a good credit score then you’ll have more choice. But there are mortgages for those with bad credit scores and government schemes are available to help you get on the property ladder.
There are three main credit reference agencies and they all have different scoring systems. Experian considers a score above 881 to be good, while Equifax say it’s anything over 420. TransUnion rate scores over 604 as good.
But in reality, these ‘scores’ are just a guideline. Each lender will have its own criteria that it scores you against, so just because you don’t fit the profile of one lender, it doesn’t mean you won’t be able to get a mortgage anywhere.
A broker is a mortgage expert with knowledge of all products and lenders on the market. They work on your behalf to search the mortgage market to find a mortgage you can afford and apply for successfully.
Once they've reviewed your income and expenditure, the size of your deposit and the amount you want to borrow, the broker will advise you which mortgage products are are right for your circumstances.
They'll make you aware of the interest rate, benefits (like cashback) and fees that apply to your mortgage.
Brokers usually have access to the whole market unless the lender chooses not to give them access to their products. Even then, the broker can see the details of the mortgage, but won't be able to complete the transaction for you.
To get access to these mortgages, you'll have to approach the lender directly. But there’s a risk that you’ll apply for an unsuitable or unaffordable mortgage, or that the lender rejects you, which could adversely affect your credit record.
Brokers either charge a flat fee, of around 1% of the mortgage value, or a commission based on the size of your loan. The broker must tell you what you're going to pay before you agree to the mortgage.
The cost's illustrated in the 'key facts' document outlining your mortgage repayments, fees and charges.
If you have problems with your credit history, it can be harder to find a mortgage. But there are some lenders that will consider your application.
You might be asked to provide more evidence that you can afford repayments and you’ll be asked about your previous credit problems.
You’ll get a lump sum after completion, which can be great to pay off fees or buy essentials for your new home.
They don’t necessarily offer the best rate, and may come with larger fees, so compare and get advice on the overall cost.
Mortgages that let you put down a smaller deposit, such as 5%.
For really small or no-deposit mortgages, you might be limited to products like guarantor mortgages, where a family member commits to making repayments if you can’t.
If you're self-employed, you'll need to provide two to three years’ worth of accounts to prove you can afford a mortgage.
Other than that, they’re the same as for employed applicants.
Lenders are less likely to lend on homes of non-traditional or unusual construction.
You might have to put down a larger deposit and you’ll probably have less deals to choose from.
Page last reviewed: 17 March 2022
Next review due: 17 June 2022
THINK CAREFULLY BEFORE SECURING OTHER DEBTS AGAINST YOUR HOME. YOUR HOME OR PROPERTY MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE
PLEASE NOTE: THE FCA DOES NOT REGULATE MOST BUY TO LET MORTGAGES