How
much could my mortgage cost?
How
much can I afford to borrow?
What
interest rate am I paying?
How
much could my mortgage cost?
This will depend on a number
of key factors. For example:
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|
The
Interest Rate |
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|
The higher the interest
rate, generally the higher
your payment will be for
a mortgage of the same
amount and term, but lower
interest rate. |
| |
|
Loan
Amount |
| |
|
The
higher the loan amount,
the higher your monthly
costs will be (subject
to your specific loan
arrangement). |
| |
|
Payment
Term in years |
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|
The
shorter the term, generally
the more you will pay
per month for a 'repayment'
mortgage with the same
payment interest rate
and the same loan amount.
However, the term does
not affect the monthly
amount your mortgage will
cost you if it is an 'interest
only' mortgage with the
same loan amount and interest
rate. |
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|
The
Type of Mortgage |
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|
An
'Interest Only'
mortgage is where
you repay the loan amount
separately, for example,
by an Investment Vehicle
such as an ISA, Endowment,
PEP or Pension. Provided
the interest rate is constant,
the monthly amount will
remain constant, regardless
of the length of the loan.
A 'Repayment'
mortgage is a
mortgage where you pay
off part of the capital
each month as part of
your regular payment.
The balance of the monthly
payment is interest. The
amount of capital you
pay off per month generally
increases towards the
end of your mortgage term.
For example: |
| |
For Illustration
purposes only.
In general,
the shorter the period
of the loan, the higher
the monthly payment will
be. |
back
How
much can I afford to borrow?
This will depend on a number
of key factors. For example:
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|
Income |
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|
Most
mortgages lenders allow
a multiple of income as
the maximum amount of
loan. For example:
3.5 x single income
3.5 + 1 x joint income
Borrowing to these levels
may not be affordable.
|
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|
My
Financial Commitments |
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|
A
Mortgage lender will ask
you about your financial
commitments and take these
into account to assess
your maximum loan amount.
For example: personal
/ car loans, maintenance
payments. |
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|
Credit
History |
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|
A
Mortgage lender will ask
you about your credit
history. If you have a
bad credit history you
may be offered a mortgage
at a higher rate than
advertised or could be
declined. |
| |
|
The
Interest Rate |
| |
|
The
higher the interest rate,
generally the higher your
payment will be for a
mortgage of the same amount
and term, but lower interest
rate. |
| |
|
The
Loan Amount |
| |
|
The
higher the loan amount,
the higher your monthly
costs will be (subject
to your specific loan
arrangement). |
| |
|
The
Payment Term in years |
| |
|
The shorter the term,
generally the more you
will pay per month for
a 'repayment' mortgage
with the same payment
interest rate and the
same loan amount. However,
the term does not affect
the monthly amount your
mortgage will cost you
if it is an 'interest
only' mortgage with the
same loan amount and interest
rate. |
| |
|
An
'Interest Only' Mortgage |
| |
|
Is
where you repay the loan
amount separately, for
example, by an Investment
Vehicle such as an ISA,
Endowment, PEP or Pension.
Provided the interest
rate is constant, the
monthly amount will remain
constant, regardless of
the length of the loan.
|
| |
|
A
'Repayment' Mortgage |
| |
|
Is
a mortgage where you pay
off part of the capital
each month as part of
your regular payment.
The balance of the monthly
payment is interest. The
amount of capital you
pay off per month generally
increases towards the
end of your mortgage term.
For example: |
| |
For
Illustration purposes
only.
In general, the shorter
the period of the loan,
the higher the monthly
payment will be. |
back
What
interest rate am I paying?
The interest rate you pay is
dependent on your individual
circumstances and the mortgage
products you may have access
to. Lenders will take into account
different factors in deciding
what interest rate to allow
you to borrow at including:
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|
Loan
to Value |
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|
Having
a bigger deposit reduces
the loan to value ratio
and gains you access to
better mortgage deals. |
| |
|
Lender
Criteria |
| |
|
If
you have adverse credit,
you may be considered
high(er) risk by the lender,
and they may charge a
premium for this in the
form of a higher interest
rate. |
| |
|
Size
of Loan |
| |
|
If
you are borrowing a larger
amount, you may gain access
to special rates. |
| |
|
Macro
Economic Factors |
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|
The
two main factors which
determine borrowing costs
are the bank of England
base rate and the risk
premium the bank applies.
The bank of England base
rate can vary, and if
you have a tracker mortgage
your mortgage repayments
will also vary. Opting
for a fixed rate mortgage
is one way to protect
yourself from these movements. |
| |
|
Special
Deals |
| |
|
From
time to time, special
deals are available for
certain classes of buyer.
We are updated daily from
many of the top lenders,
so feel free to enquire. |
| |
|
Fees |
| |
|
Although
not strictly related to
the interest rate, Fees
can have a dramatic effect
on the overall cost of
your mortgage. In many
cases, the fees disproportionately
higher for headline grabbing
low rate deals, making
them unfavourable. |
| |
|
Other
Mortgage Factors |
| |
|
Interest
only Vs Repayment:
An 'Interest Only'
mortgage is where
you repay the loan amount
separately, for example,
by an Investment Vehicle
such as an ISA, Endowment,
PEP or Pension. Provided
the interest rate is constant,
the monthly amount will
remain constant, regardless
of the length of the loan.
A 'Repayment'
mortgage is a
mortgage where you pay
off part of the capital
each month as part of
your regular payment.
The balance of the monthly
payment is interest. The
amount of capital you
pay off per month generally
increases towards the
end of your mortgage term.
For example: |
| |
|
Payment
Term in years |
| |
|
The
shorter the term, generally
the more you will pay
per month for a 'repayment'
mortgage with the same
payment interest rate
and the same loan amount.
However, the term does
not affect the monthly
amount your mortgage will
cost you if it is an 'interest
only' mortgage with the
same loan amount and interest
rate. |
If you have not found the information you are looking for, further information on residential mortgages and insurance can be found at www.hedgelandsmortgages.co.uk.
back
|
Your home may be repossessed if you do not keep up repayments on your mortgage.
For mortgage advice we
can charge a fee of typically
£500 or we can receive
commission from the lender.
|
Hedgelands Financial Services, Hedgelands, Abbotskerswell, Newton Abbot, TQ12 5PW
Hedgelands Financial Services is a trading name of Honister Partners Ltd. Honister Partners Ltd is an appointed representative of Sage Financial Services Ltd, which is authorised and regulated by the Financial Services Authority. Sage Financial Services Ltd is entered on the FSA register (www.fsa.gov.uk) under reference 150452. The information and content of this website is intended for UK consumers only and is subject to the UK regulatory regime. The FSA do not regulate will writing services and some forms of mortgages and tax planning services. Honister Partners Ltd Registered Office 1 Nicholas Road, London W11 4AN. Registered in England and Wales no. 06923303. |
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Hedgelands Financial Services
Hedgelands
Abbotskerswell
Newton Abbot
Devon TQ12 5PW
map
Telephone:
0845 165 1280
01626 360654
General Insurance:
0845 165 1281
01626 336808
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