Mortgage Calculator UK
The UK Mortgage Calculator is a fixed-interest mortgage calculator especially customized for UK users with the GBP as the currency. Just change the values in the following fields and click "Calculate" to use.
Interest Only: £781.25
Monthly Repayment: £1,096.11
Mortgage Amortization Graph
There are some special tricks that will help in getting a mortgage, especially for the first time, in the United Kingdom. UK banks are very businesslike, so the more that you can show good preparation for the process, the better the reception you will get. You definitely want to have your papers in order, so the banker doesn't have to waste time pulling them together for you.
You should have ready:
- Your addresses for the last three years, with no gaps
- Your pay information or income information for the last three months, as well as three years of income records.
- Your bank statements for at least the past three months, and usually it's wise to have a full year.
- Documentation of any loans or credit cards.
Having all this together in proper form will put you a step ahead with the bank. Then, you should check your credit score with Equifax to see that you have no issues. If you do have some, it is best to raise them yourself with the banker before the bank runs a check.
Assuming you do have good credit in the UK, it is still possible to borrow with a relatively small down payment, according to the London-based financial information service Moneyfacts. There are now 49 mortgage loan products requiring a deposit of as little as 5 percent of the property value. This changes with market condition though.
Most banks in the UK favor variable-rate mortgages in one form or another. There are a wider variety of mortgages of this type in the UK than there are available in the U.S. For example, UK banks offer a number of kinds of tracker mortgages. These are basically a type of variable rate mortgage. What makes them different from other variable rate mortgages is that they follow – track – movements of another rate. Most commonly the rate that is tracked is the Bank of England base rate, but it is quite possible to arrange a tracker that follows another rate. Some mortgages start out as trackers, and then, after a few years, become standard variable-rate mortgages.
As Moneyfacts points out, introductory tracker rates can be amongst the very lowest mortgage interest rates available. However, like all variable rates they can go up as well as down. Also most introductory tracker rates will most likely have an Early Repayment Charge if you remortgage or repay the mortgage during the introductory period. If you're on a lifetime tracker mortgage there will sometimes be an Early Repayment Charge for a period after you take it out.
Another unusual UK mortgage is the flexible mortgage. With this kind of mortgage, you can overpay, underpay, and even take a payment holiday from your mortgage from time to time. The overpayment feature allows you to pay the loan down faster, either in lump sums or as part of the regular payment process. The underpayment feature lets you make lower monthly payments from time to time. Payment holidays allow you to go without paying – some banks allow up to six months.
None of these features come without special charges and conditions, so you should shop around carefully and compare the costs when taking out a mortgage of this kind.
Another particular aspect of mortgages in the UK is stamp duty. This is a tax that is payable when you buy a property. Stamp Duty is charged as a percentage of the purchase price. Depending on which price bracket your property falls in, the percentage you pay can vary:
Up to £125,000 0%
From £125,000 to £250,000 2%
From £250,000 to £925,000 5%
From £925,000 to £1.5 million 10%
Over £1.5 million 12%
The Stamp Duty rate above is effective from 4 December 2014.