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How to Use a First-Time Buyer Mortgage Calculator

Online calculators can be an attractive tool for any first-time buyer UK and provide an indication as to the maximum you may be able to borrow, the deposit you will need, and the interest rates you are likely to pay.

Almas Uddin
Almas Uddin

Founder and Mortgage Advisor

Almas Uddin2024-06-14
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Easy-to-Use Mortgage calculator for first-time buyers

Online calculators can be an attractive tool for any first-time buyer UK and provide an indication as to the maximum you may be able to borrow, the deposit you will need, and the interest rates you are likely to pay.

However, there is a caveat since a first-time buyers mortgage calculator works on assumptions and averages and cannot analyse some of the important factors, such as your credit score, the nature of your employment, or whether the property is considered non-standard.

Revolution Finance Brokers explains the benefits of using a mortgage calculator first-time buyer tool, but always recommends speaking to an independent, experienced broker if you’d like a more accurate idea of your prospects as a first-time home buyer.

The Pros and Cons of a First-Time Buyers Mortgage Calculator

Purchasing your first home is a huge step, and as a first-time buyer UK you likely have many questions, such as:

  • What is the maximum a lender will offer a first-time home buyer?
  • How does my salary affect the total I can borrow as a first-time buyer UK?
  • What sort of deposit do I need to purchase a first-time home buyer property?
  • What will my monthly first-time buyer UK repayments look like?
  • How much stamp duty will I be liable for as a first-time home buyer?

A first-time buyers stamp duty calculator can certainly help with the final question, and this is far less subjective because your stamp duty liability will remain the same, provided the value of the property doesn’t change, and regardless of your circumstances.

However, a first-time buyers mortgage calculator is different because you’d likely get a different response to every question, depending on the lender you ask.

For example, one lender may have a first-time home buyer product with a minimum 10% deposit and a maximum salary multiple of four times – and another could require a 5% down payment but lend up to 3.5 times your annual earnings.

These variances between lender policie for first-time home buyer applicants mean that a first-time buyer mortgage calculator is only ever a rough guide and shouldn’t be used to make definitive decisions about your long-term finances.

AboutAbout your mortgage
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What’s your yearly income?

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Do you receive a regular bonus?

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about your mortgage

Based on your yearly income,
you may be able to borrow

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Most lenders will let you borrow 4.5 times your annual salary so, as long as you have a standard 10% deposit, you should be able to borrow this much.

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Depending on your personal circumstances, some lenders may let you borrow 5 times your salary.

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Lenders usually cap the amount they lend at 5.5 times your salary, so it’s unlikely you’ll be able to borrow more than this.

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Using a First-Time Buyers Mortgage Calculator to Compare Products

Revolution is a whole-of-market broker, which means we compare hundreds of products from a huge network of lenders before we suggest the right option for a first-time home buyer.

It can be useful to use a mortgage calculator first-time buyer to get a better understanding of how your borrowing options and repayment costs might differ based on interest rates, incentives, interest-only and repayment mortgages.

Again, the caveat is that the interest rates a lender publishes alongside a first-time home buyer mortgage are indicative, not definite, and it’s very likely your offer will include a higher interest cost if you don’t match their ideal applicant profile.

That said, you can try using a first-time buyer mortgage calculator to explore how your repayments might change if you extend a 25-year mortgage to 30 years or what might happen to your monthly costs if the interest rates increase.

How to Use a First-Time Buyers Mortgage Calculator

If you’ve never used a first-time buyer mortgage calculator before, we’ll run through how they work so you have a better idea of the information you’ll need to run through some comparisons.

The advantage is that you only need to provide a few pieces of information to get a rough idea of mortgage rates, monthly costs and the amount you’re likely to be allowed to borrow without paying a fee or having a check on your credit file.

Make sure you match the definition of a first-time home buyer before you depend on a first-time buyers stamp duty calculator, or assume you will be eligible for a first-time home buyer mortgage since the rates and thresholds offered will not apply if you are not eligible.

To qualify, you must be a true first-time home buyer and have never owned a property in any country or through any acquisition method – the same applies to joint parties in your mortgage application.

Checking How Much You Can Borrow Via a First-Time Buyer Mortgage Calculator

The total you can borrow on a first-time home buyer mortgage will depend on the lender's policies and your income, including:

  • Your annual salary, plus that of a joint applicant, where applicable.
  • Other debts, and your debt-to-income ratio.
  • Your regular outgoings and expenses.

Lenders with first-time home buyer mortgage products will need to ensure you meet their affordability requirements and also have caps on the amount they can lend based on a multiple of your income.

Stress testing means a lender will assess whether they think you’d be likely to continue to afford your first-time home buyer mortgage were interest rates to rise above a theoretical rate, so if you just about meet the affordability requirements, it’s not certain you will be approved for this level of first-time home buyer borrowing.

Calculating Your Deposit Requirement With a Mortgage Calculator First-Time Buyer

Most first-time buyer UK applicants need a deposit of at least 5%, and sometimes 10%, although those with higher risk factors may be asked to provide a higher down payment.

A mortgage calculator first-time buyer tool can give you an idea of the deposit you'd need based on the amount you'd like to borrow and what the property is worth.

While having a larger deposit can make a considerable difference to the interest rates you pay and the lenders who are likely to approve your application, a mortgage calculator first-time buyer tool can help you work out how much you need to save or how close you are to your goal.

Note that these indications are rough estimates, and even if a lender advertises a first-time home buyer product with a 5% deposit, that doesn’t necessarily mean every applicant will be offered a loan on those terms.

First-Time Buyers Mortgage Calculator to Help With Affordability

Mortgage lenders need to know what you earn and your regular outgoings to ensure you can afford the repayments and are not a default risk. As a first-time home buyer, you'll need to provide evidence such as payslips, bank statements and your employment contract to evidence the information on your application.

Although a first-time buyer mortgage calculator can be useful, this isn’t a metric a calculator can assess accurately.

That’s because a lender will also examine other factors, such as whether you are in a probation period or a permanent contract.

First-time home buyer applicants in self-employment or with non-standard earnings such as bonuses, commissions and overtime may find that a lender assesses their income somewhat differently from a first-time buyers mortgage calculator.

For example, one lender might include 100% of your income and multiply it by 3.5 to 4 times to arrive at a maximum loan value. Another might exclude all but your basic salary and offer a very different mortgage amount.

Checking Mortgage Interest Rates With a First-Time Buyers Mortgage Calculator

Interest rates can be complex, and many first-time home buyer applicants use a first-time buyer mortgage calculator to assess what they mean in terms of monthly repayment costs.

A first-time buyers mortgage calculator can be handy, and you can enter different interest rates to compare products. However, don’t forget that interest is just one cost element of taking out a mortgage.

Even if one interest rate looks highly favourable to another, there may be product fees, application charges and administration costs that mean a first-time home buyer mortgage without any fees is actually much cheaper than a product with a lower interest rate.

Independent Advice on Calculating Your First-Time Home Buyer Mortgage Costs

As we’ve seen, a first-time buyer mortgage calculator can be useful in lots of ways, but doesn’t have the capacity to assess your circumstances, eligibility or the nuance of lending terms, and the way a lender might adjust your mortgage offer based on your circumstances.

If you’d like an accurate evaluation of any of the figures we’ve discussed here, please contact Revolution Finance Brokers at any time for more exact information.

Almas Uddin
Almas Uddin

Founder and Mortgage Advisor

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Frequently Asked
Questions

A calculator is a free online tool where you can enter figures such as your income and total mortgage value and get an idea of the repayment costs or how much you can borrow as a maximum.

Calculators provide generic answers based on averages and assumptions – they can’t check your credit score or verify whether you meet the lender's criteria to qualify for the best interest rates or maximum income multiplier.

Therefore, while a first-time buyer mortgage calculator is handy, the answers it produces are only ever indicative and shouldn’t be used to make any long-term decisions about which first-time home buyer mortgage to apply for.

Yes, stamp duty is a standard tax charge calculated on the value of the property – it doesn’t adjust regardless of your income, deposit value, credit score or any other element of your first-time home buyer mortgage application.

Provided you meet the definition of a first-time buyer UK, the information produced by an online calculator should show you accurately what you'll need to pay in property taxes.

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The content included in our articles, blogs, web pages and news publications is based on information accurate at the time of writing. Note that policies and criteria can change regularly throughout the UK mortgage lending market, and it remains essential to contact the consultation team to receive up to date guidance. The information included on the Revolution Brokers site is not bespoke to any circumstances or individual application scenarios and therefore is not intended to be used as financial advice. The content we share is designed to be informative and helpful but cannot be relied upon to provide individual advice relevant to your mortgage requirements. All Revolution team members are fully qualified, trained and experienced to provide mortgage advice of an independent nature.

We collaborate with lenders and providers who are regulated, authorised and registered with the Financial Conduct Authority (FCA). Should you require specific mortgage borrowing types, some products such as buy to let mortgages may not be FCA regulated. The Revolution team can provide further information about regulated and unregulated lending as required. Please remember that a mortgage is a debt which is secured against your home or property. Your home can be at risk of repossession if you do not keep up with the repayments or encounter any other difficulties in managing your mortgage borrowing responsibly. This also applies to any remortgage or home loan secured against your property, including equity release products.

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