Mortgage Calculator UK

The UK Mortgage Calculator is mainly intended for United Kingdom residents using the British Pound currency.

Amortization schedule

In the United Kingdom (UK), it is usually very helpful when potential mortgage borrowers show good preparation for the process by bringing along all the information that may be required when applying for a mortgage at a bank, such as:

1. addresses for the last three years, no gaps
2. income information for the last three months, as well as three years of income records
3. bank statements for the past three months, though it can help to have more
4. documentation of loans or credit cards

On top of that, a good second step is to check credit scores and raise any questionable negative marks with the banker that issues the mortgage. Assuming good credit in the UK, it is possible to borrow with a relatively small down payment. There are many mortgage loan products requiring deposits of 5% or less of the property value, though it can change accordingly with market conditions.

Tracker Mortgage

A tracker mortgage is a type of mortgage that follows the movements of other rates, the most common of which is the Bank of England base rate. Most banks in the UK favor variable-rate mortgages in one form or another. Therefore, there are a wider variety of mortgages of this type in the UK. Some mortgages start out as trackers and, after a few years, become standard variable-rate mortgages.

Introductory tracker rates can be among the lowest mortgage interest rates available. However, like all variable rates, they can go up as well as down. Also, most introductory tracker rates will likely have an early repayment charge when remortgaged or repaid during the introductory period. Borrowers with a lifetime tracker mortgage can expect to see early repayment charges for a period after being taken out.

Flexible Mortgage

A flexible mortgage is a mortgage type that allows the borrower to overpay, underpay, or take a payment holiday from a mortgage from time to time. The overpayment feature can be used to pay the loan down faster, either in lump sums or as part of the regular payment process. The underpayment feature is used to make lower monthly payments from time to time, and payment holidays can be used to avoid payment for brief stints, sometimes up to six months. However, these features usually come with special charges and conditions, so shop around carefully and compare the costs of flexible mortgages.

Stamp Duty

A unique aspect of mortgages in the UK is stamp duty, which is a tax that is charged as a percentage of the purchase price when a property is bought. Depending on the price bracket that the property falls in, the percentage can vary:

Up to £250,000	0%
From £250,001 to £925,000	5%
From £925,001 to £1,500,000	10%
Over £1,500,001	12%

There is a special discount (relief) for first-time buyers if the purchase price is £625,000 or less. Stamp tax is not applicable for first-time buyers of properties worth £425,000 or less and the existing rate of 5% will apply between £425,000 and £625,000. Properties over £625,000 follow the same rules as buyers not buying for the first time.

There are other special rules that apply in regards to stamp duty in the UK, such as higher rates for additional properties and different rates in different countries. Furthermore, special rules apply in specific instances, including the replacement of a main residence, when corporate bodies or shared ownership properties are involved, when buying six or more properties in one transaction, for multiple transfers between the same buyers and sellers, and many more. Stamp duty can be complex, and it is best to consult professionals to determine the precise rate that will be charged on any property purchase.

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