How much can I borrow?

YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE.

Affording a mortgage

To get an idea of what you can afford to pay out each month on a mortgage, add up your monthly outgoings, e.g. any loans you are currently paying off, utility bills, food, travel expenses, and take the total away from your monthly income. You can use our mortgage calculator to work out what we may be able to lend you and how much your monthly payments could be.

Deposits & loan to value

Mortgage lenders assess the amount you want to borrow against the value of a property. This is called loan to value (LTV). Most mortgages require a deposit of at least 5% of a property’s value, which is a LTV of 95%. The average deposit is usually around 20% to 25% of a property’s value which is a LTV of 75% to 80%. You’re likely to get a mortgage deal with a lower interest rate if the LTV is under 60%.

Mortgage repayments

The amount you pay back each month will depend on:

• the amount you are borrowing
• the mortgage interest rate
• the type of mortgage, e.g. repayment or interest only
• the term of the mortgage
  
  

You can get an idea of what the repayments could be by using our mortgage calculator

Mortgage fees

When taking out a mortgage, you should factor in any fees that may be charged for arranging the mortgage and for a property valuation.

For facts and figures on key home buying costs view our infographic on the cost of buying a home in Britain

For further information, please read our Homebuyer Guide