Top 10 UK Mortgage Calculators & How They Work

Mortgage calculators are online tools to determine how much you can borrow and the monthly or yearly cost for new and existing mortgages. Other types of tools include a mortgage overpayment calculator, which works out the effect of additional payments on your mortgage balance (see MoneySavingExpert’s calculator below).

How do mortgage calculators work?

Most mortgage calculators have a degree of flexibility catering for both repayment and interest-only mortgages, as well as the cost of any change in interest rates charged. In addition, there is usually a provision to enter different deposit amounts, mortgage terms and interest rates to see the effect on the monthly mortgage payments. Doing this is helpful for buyers or those refinancing to work out an affordable mortgage payment.

What information is needed to use a calculator?

To start the process, all that is required is to enter into the mortgage calculators some basic details, including your earnings, to determine how much you can borrow; next, enter the price (for new mortgages) or the property value/amount owing (for those refinancing). Finally, enter the mortgage term and interest rate. Usually, the interest rate figure is entered by default, as the calculators are primarily used for new mortgages or refinancing.

How much can I borrow?

Many mortgage companies use a multiple of your annual income to determine how much they’ll lend to you. Others look at your income and expenditure and work it out that way, and there’s no hard and fast definition. As a general rule of thumb, lenders use an income multiplier of between four to five times your income, sometimes as much as six. If your credit history is poor, then lenders may apply a lower-income multiplier.

Who offers a mortgage calculator to try for free?

Many banks, mortgage companies and finance houses offer a mortgage or finance calculator to help you calculate the monthly costs for taking out their financial products. We take a look at a number of them. The first three from Moneysavingexert, MoneyHelper and Which? are impartial and not trying to sell you their products or services; the others are interested in selling you something.


1. MoneySavingExpert mortgage calculator

Money-Saving-Expert basic mortgage calculator

The Moneysavingexpert mortgage calculator states:

‘Comprehensive mortgage calculator, as well as the basic mortgage calc you can check the impact of savings vs mortgages, offset mortgages, overpayments… Source: MoneySavingExpert.

How does the calculator work?

MoneySavingExpert says its basic mortgage calculator works out the monthly and total costs over the mortgage term, including any fees and interest added. In addition, the calculator works out both repayment and interest-only mortgages. Unfortunately, Moneysavingexpert doesn’t appear to have a calculator for how much you can borrow (dependent on your earnings), which is essential when planning a mortgage.

MoneySavingExpert also offers a mortgage overpayment calculator to illustrate the effect of any additional payments you make on the mortgage debt. For example, the calculations show the impact of one-off payments or regular payments on the outstanding mortgage.

MoneySavingExpert suggests:

  1. Check your mortgage company allows you to overpay and by how much,
  2. Check if there are any penalties if you want to overpay,
  3. Watch out for any limitations if you’re on a fixed-rate mortgage,
  4. Ensure any overpayment goes to reduce the outstanding mortgage and not reduce the monthly repayments.

The mortgage calculator provided by Money Saving Expert appears to be the most impartial, but do check the small print if any recommendations are made to you to purchase financial products or services through them.


2. MoneyHelper mortgage calculator

Money Helper mortgage calculator
Money Helper mortgage calculator

The MoneyHelper mortgage calculator states:

“Use our free MoneyHelper mortgage calculator to find out how much mortgage you will pay each month based on the price of your property and how much deposit …” Source: Moneyhelper.

How does the calculator work?

MoneyHelper says its mortgage calculator is for interest-only mortgages, new mortgages and interest rate rises. The deposit, mortgage term and interest rate are adjustable to see how your monthly payments are affected.

MoneyHelper covers how much you can borrow by asking for details of earnings and outgoings to enter into their separate affordability calculator to give to mortgage lenders, who’ll work out what they can offer.

MoneyHelper is a service provided by the Money & Pensions Service at UK Government, therefore is most likely to be impartial, similarly to MoneySavingExpert.

3. MoneySuperMarket mortgage calculator

Money Supermarket mortgage calculator
Money Supermarket mortgage calculator

The Moneysupermarket mortgage calculator states:

“Use our range of mortgage calculators to work out how much you could borrow, how large a deposit you will need for a mortgage and if you are overpaying.” Source: Moneysupermarket.

MoneySuperMarket is a price comparison site, and therefore they may earn commissions or fees from introducing customers to product providers.

How does the calculator work?

First, the MoneySuperMarket has two calculators, one for how much you can borrow and the other for what a mortgage will cost, etc. They remind you that Banks and building societies use your income in deciding how much you can borrow for a mortgage. They say that the deposit you have and your credit rating are also factors and that any calculation is just a rough guide.

Their mortgage repayment calculator works out repayments based on the interest rate and any fees, the sum borrowed and the mortgage term, but doesn’t go into much more detail than that, which might be because they are not a mortgage lender but a price comparison site.

MoneySuperMarket say that a mortgage is a significant financial commitment; therefore, you need to know what the monthly costs are going to be.


4. Bankrate mortgage calculator (Uswitch)

Bankrate mortgage calculator
Bankrate mortgage calculator

The Bankrate mortgage calculator states:

Use a mortgage borrowing calculator. Since the 2008 financial crash, mortgage lenders are far stricter regarding who they will lend to.” Source: Bankrate.

How does the calculator work?

Bankrate explains their calculator works out how much buyers can borrow (first-time, moving house or remortgaging), as well as how mortgage companies assess what they will lend to you. If remortgaging, then you’ll need to know how much your house is worth.

The calculator requests information such as income, expenditure and details of the mortgage you require.

About Bankrate

Bankrate is a trading name of Uswitch, similar to MoneySupermarket in that they may receive commissions for introducing users of their mortgage tools to third parties.


5. Halifax mortgage calculator

Halifax Mortgage Calculator
Halifax Mortgage Calculator

The Halifax mortgage calculator states:

“Compare all the mortgages on offer with our mortgage calculator. Halifax’s mortgage calculator can help you get the best rates.”

Source: Halifax.

How does the calculator work?

The Halifax calculator gives you a choice as to what you wish to do first, either check how much you can borrow or get some idea about the cost of a mortgage. Completing both the affordability and costs calculators gives you the information needed to make a formal application. Do this through the Halifax customer service telephone number.


6. HSBC mortgage calculator

HSBC mortgage calculator
HSBC mortgage calculator

The HSBC mortgage calculator states:

“Our mortgage calculators will help you understand what your mortgage may cost. Find out what you could borrow and what your payments will be today.” Source: HSBC.

How does the calculator work?

HSBC has two separate calculators, one which works out how much you can borrow and the other, the mortgage payments due.

The calculator asks for basic information, such as income, deposit and property value, which, when entered, calculates the Loan to Value ratio and, therefore, what rates are available. Once you enter income details, the calculator works out the maximum mortgage HSBC will lend.

There is a warning that any figures provided by the calculator do not consider household expenditure, property condition, or credit history.

The HSBC calculator algorithm.

Firstly, regarding repayment amounts rounding, it is the unrounded repayment that the calculator uses to work out the interest due over the loan term. Secondly, the interest rate inputted by default is a nominal rate used to work out the interest due over the mortgage term. The calculator assumes that throughout the mortgage, the interest rate stays the same. Finally, regarding the timing of interest conversion, the assumption is that interest charges have the same frequency as repayments.

7. Santander mortgage calculator

Santander mortgage calculator
Santander mortgage calculator

The Santander mortgage calculator states:

“Mortgage calculators. Find out how much you could borrow and what your monthly payments could be. See the impact an overpayment on your mortgage could make…” Source: Santander.

How does the calculator work?

Santander has several calculators,

  1. How much can you borrow?
  2. What are the mortgage costs?
  3. A home deposit calculator to work out the deposit you’ll need for a mortgage.
  4. A calculator for additional borrowing illustrates how much extra you could borrow and the rates offered for the Santander mortgage contract.

8. NatWest mortgage calculator

NatWest mortgage calculator
NatWest mortgage calculator

The NatWest mortgage calculator states:

“Find out how much you could borrow for a mortgage, compare rates and calculate monthly costs using our mortgage calculator.”

Source: NatWest.

How does the calculator work?

The mortgage calculator from NatWest promises to provide you with the monthly cost of a mortgage and how much you can borrow in under five minutes from completing their online form. Details required include an estimate of the house you’re planning to buy, how much you’ve got towards its price and the term of the mortgage (calculated to finish before retirement), together with details of any outstanding loans or credit cards.

NatWest has a disclaimer to the effect that All figures are illustrative only and depend on the financial situation, deposit and the property’s value.


9. Nationwide mortgage calculator

Nationwide mortgage calculator
Nationwide mortgage calculator

The Nationwide mortgage calculator states:

“Use our online tools and mortgage calculators to work out what you can afford to borrow and how much your monthly payments could be with a Nationwide …” Source: Nationwide.

Nationwide have a comprehensive array of mortgage calculators designed to assist existing and new customers, including:

    1. A borrowing calculator – gives you an idea as to how much you can borrow based on income and expenditure,
    2. A repayment calculator –  works out how much you pay every month,
    3. An overpayment calculator – works out the effects of overpayments in reducing your mortgage,
    4.  A payment change calculator- gives you an idea as to the effect of any change in interest rates on your mortgage payments,
    5. A calculator to work out any early repayment charge you may have to pay. 

How does the calculator work?

The Nationwide calculators all ask for basic income, expenditure, property value, deposit details, etc and produces quotations much in the same way as the other mortgage calculators listed here as to affordability, how much you can borrow and the cost of mortgages, etc.


10. Barclays mortgage calculator

The Barclays mortgage calculator states:

“How much could it cost? Use our repayment calculator to see examples of monthly mortgage repayments, costs and interest rates for mortgages you could be …” Source: Barclays.

How does the calculator work?

Barclays says its mortgage calculator checks how much you can afford to borrow, work out monthly payments and check how interest rate changes might affect you.

Like the MoneyHelper website, the Barclays calculator shows how much it allows customers to borrow and work out monthly mortgage payments.

What about the algorithm detail?

Firstly, regarding the monthly repayments, the Barclays calculator divides the mortgage borrowing figure and the interest due by the number of months of the mortgage term. Secondly, as for rounding the repayment sums, they use the unrounded repayment to work out the interest paid over the mortgage term. Thirdly, they work out the total interest due over the mortgage term for the interest rate, and the calculator assumes that the rate stays the same over the mortgage term. Lastly, the assumption is that interest is applied simultaneously as the mortgage repayment and at the same frequency.

FAQs

Really how much you can afford is down to choice. If you live like a hermit and don’t spend a lot, you have more money towards any mortgage payments. Do a budget planner and work out how much you can afford to pay a mortgage every month. Some of the calculators allow you to tailor payments by extending the mortgage term or paying interest-only.

How do mortgage lenders assess affordability?

Mortgage companies use their criteria in assessing affordability by looking at your regular income and expenditure and any other borrowings you may have. Usually, the mortgage calculators algorithm is preset with multiples of between four and six times your income; therefore, someone with an income of £40,000 may be able to get a mortgage of between £160,000-£240,000. But, of course, these figures may adjust according to other factors, including your credit history, outgoings and the type and condition of the property.

How much deposit do I need for a mortgage?

The majority of the time, you’ll need at least a five per cent deposit, meaning a ninety-five per cent loan. Therefore the loan to value (LTV) is also ninety-five per cent. The bigger the deposit you can contribute, the better the rate of interest a mortgage company offers.
h2How much can I borrow without a deposit?

Borrowing without a deposit is not advisable, as a slight drop in house prices could mean you’re in negative equity and breach the mortgage conditions (loan to value covenants). However, if you need a mortgage for the total amount of the purchase price of the property you’re buying, then some mortgage companies may consider lending you the money.

Usually, a 100% mortgage comes at a price, with additional arrangement fees and a higher rate of interest payable. If your job prospects are good (doctor, dentist, accountant, etc.), then a mortgage lender may look more favourably to lending at standard mortgage rates. It may be better to save even a five per cent deposit to access better rates and a more comprehensive range of mortgage products.

Yes, you can. There are always mortgage lenders specialising in ‘sub-prime’ mortgages where borrowers have a bad credit history. The primary consideration for the mortgage lender is security, is the money they are lending to you secure and can you afford to pay it back? Naturally, the more deposit you have, the easier it is to get a mortgage if you have a poor credit history. The best bet is to consult an expert, a mortgage broker specialising in sub-prime lending.

How much mortgage can the self-employed get?

Mortgage lenders adopt the same approach for the self-employed as they do for employed applicants. Credit scoring, affordability and the property all matter in assessing eligibility. The difference is that the mortgage lender may take a more flexible approach with the self-employed as they tend to under-declare their profits, and income is less. Therefore, the mortgage lender may focus more on the quality and background of the self-employed applicant’s business and request letters from their accountant and bank, etc.

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