† The 2.87% annual interest rate is based on the Connells Group average mortgage interest rate taken from the period of 01/01/2022 – 28/09/2022, and is correct as at 29/09/2022
**Please be aware, these results are for illustrative purposes only and should not be considered as a mortgage quote. These are based on a repayment mortgage and may vary depending on the term and interest rate of your mortgage. Lender fees may also be applicable.
Want a more accurate estimate of how much you can borrow?
Your best bet is to speak to a mortgage advisor.
They can take a look at your exact situation and go through what you might be able to borrow. If you really want to be taken seriously as a buyer, you’ll want to take the time to get your mortgage agreement in principle. An agreement in principle will help you search for a property in your price range. More importantly, it helps confirm to the seller that you are serious about buying as it shows you can get a mortgage (subject to status and lender criteria).
This will really set you apart from other buyers in the market and will also give the agent and seller faith that you can afford the property you’re viewing.
Can I use the equity in my house as a deposit?
You can, yes. Your best bet is to call your lender and find out how much you owe on your mortgage. Then ask one of our expert local agents to value your home or check its value online now.
If your mortgage balance is less than your home is worth, you have equity in your property. Let’s use a quick example to show how this works… Say you have a £100,000 mortgage on a house worth £250,000. The equity (or money in the property) is £150,000. If you bought a new house for £300,000, you could pay back the original mortgage and then use the £150,000 equity as a deposit. You could take out a mortgage for the other £150,000. Another factor to consider are Early Repayment Charges (ERCs) when paying back the original mortgage. Knowledge is most definitely power when it comes to understanding mortgages, but fortunately our advisors are on hand to make everything as straightforward as possible.
If your mortgage balance is less than your home is worth, you have equity in your property. Let’s use a quick example to show how this works…
Say you have a £100,000 mortgage on a house worth £250,000. The equity (or money in the property) is £150,000.
Are you self-employed?
What are the best mortgage rates if you’re self employed? Great question. There are slightly different hoops to jump through if you don’t have a salaried job. If you’re in this position, you’ll want to speak to a mortgage advisor to get an indication of lender criteria, what you could borrow, and how much the repayments might be.
Are you investing in a buy-to-let property?
As with self employed mortgages, buy-to-let properties have slightly different criteria and things to consider, so speaking to a mortgage advisor is your best bet.
What costs are associated with buying a property?
Stamp duty or Land Tax cost
Often stamp duty can be the largest additional cost of buying a home. If you’re purchasing a main residence in England, the September stamp duty cuts mean that properties worth up to £250,000 are exempt from stamp duty and first time buyers pay no stamp duty up to £425,000.* These will remain in place only until 31 March 2025 before they revert back to previous rates. In Scotland, properties worth up to £145,000 are exempt and first-time buyer relief applies up to £175,000.** In Wales properties worth up to £225,000 are exempt from Land Transaction Tax.*** If you’re purchasing a second home, there are separate and higher rates for tax.
Survey and valuation costs
When you purchase a house, your mortgage lender will also want to conduct a valuation survey. This is designed so that the lender knows the property is worth at least what you’re paying for it. It also helps your insurer calculate the reinstatement cost when arranging your buildings insurance (to cover the cost to completely rebuild the property in the event of fire etc.) Some lenders don’t charge a mortgage valuation fee but, if they do, they usually vary according to the value of the property and lenders will have their own fee scale.
In addition to the lender’s checks, it is always worth getting a professional survey. This will give you an idea of the property’s structure and condition before you buy it. Surveys costs vary as there are several options to choose from depending on property type and level of detail, so head here if you’re unsure of what’s available.
While a survey does involve an initial outlay of money, adding to the cost of buying a house, it does give you re-assurance that your future home is in good condition and you won’t be having to fork out for expensive repairs further down the line. You don't want to have your offer accepted only to find out that the Aga's bust or the electrics are ancient and frazzled. It happens.
The cost of owning a home
Once you have moved into a property, it isn’t just the mortgage you have to pay every month. There are some other costs involved with owning a home. For example:
- Water, gas and electricity bills are going up and these can be expensive monthly costs, possibly adding up to a few hundred pounds a month.
- Council tax has to be paid by occupants of properties, and can range from a couple of hundred pounds a year to £1,493.****
- Buildings and contents insurance. You must have buildings insurance in place to qualify for a mortgage. Speak to us today.