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.
