Question 1

Is it better to overpay a mortgage or save?

Accepted Answer

Whether it's better to overpay your mortgage or save depends on your financial goals and interest rates. Overpaying your mortgage can save you money in interest and shorten your loan term. However, if your savings account offers a higher interest rate than your mortgage rate or if you need an emergency fund, saving might be the better choice. It’s also wise to consider early repayment charges and your overall financial security before deciding.

Question 2

Can you overpay an interest-only mortgage?

Accepted Answer

Yes, you can overpay an interest-only mortgage, but it will reduce the outstanding balance, not the interest-only payments. Interest-only mortgages require paying off the principal at the end of the term, so overpaying can help reduce the final amount owed. Always check with your lender about overpayment limits and any associated fees.

Question 3

How is mortgage interest calculated in the UK?

Accepted Answer

Mortgage interest in the UK is typically calculated daily or monthly, based on the outstanding balance. The interest rate is applied to the principal amount, and depending on whether the interest is calculated daily or monthly, the amount can vary slightly. For a simple monthly interest calculation, divide the annual rate by 12 and apply it to the balance. For daily interest, divide the annual rate by 365 and apply it to the daily balance.

Question 4

How to work out loan to value?

Accepted Answer

Loan to Value (LTV) is calculated by dividing the amount of the loan by the value of the property, then multiplying by 100 to get a percentage. For example, if you want to borrow £150,000 for a property worth £200,000, the LTV is: (150,000 / 200,000) x 100 = 75%

Question 5

What is Loan to Value?

Accepted Answer

Loan to Value (LTV) is a percentage that represents the ratio of the mortgage amount to the value of the property. It’s used by lenders to assess risk—higher LTV ratios mean higher risk. For example, an 80% LTV means you are borrowing 80% of the property’s value, with a 20% deposit. LTV affects interest rates; typically, a lower LTV results in a better interest rate.

Question 6

What is an interest-only mortgage?

Accepted Answer

An interest-only mortgage is a type of loan where you only pay the interest each month, without reducing the principal balance. At the end of the term, you must repay the full original amount borrowed. These mortgages result in lower monthly payments compared to repayment mortgages but require you to have a plan for repaying the principal at the end of the mortgage term.

Question 7

How much deposit is required for a mortgage?

Accepted Answer

The deposit required for a mortgage in the UK usually ranges from 5% to 20% of the property value, depending on the lender and the type of mortgage. A higher deposit generally means better mortgage rates and terms. For example, a 10% deposit on a £200,000 property would be £20,000, while a 20% deposit would be £40,000. The more you can put down as a deposit, the more likely you are to secure a better rate.

Mortgage Calculator UK

Mortgage calculator UK

Mortgage Deposit Calculator

Mortgage Overpayment Calculator

Interest Only Mortgage Calculator

Mortgage Repayment Calculator

Get Started at
No-Cost

Free

All Property Tools

Property
Info Form

Portfolio
Builder

Property

Compare

Key
Transactions

Cashflow Forecaster

Key
Metrics

Max
Spend

LTV

Adjuster

Mortgage

Compare

Equity

Release

Capital

Growth

Mortgage Calculator UK

Mortgage calculator UK

Mortgage Deposit Calculator

​Mortgage Overpayment Calculator

Interest Only Mortgage Calculator

Mortgage Repayment Calculator

Get Started at No-Cost

Free

All Property Tools

Property Info Form

Portfolio Builder

Property

Compare

Key Transactions

Cashflow Forecaster

Key Metrics

Max Spend

LTV

Adjuster

Mortgage

Compare

Equity

Release

Capital

Growth

Mortgage Overpayment Calculator

Get Started at
No-Cost

Property
Info Form

Portfolio
Builder

Key
Transactions

Key
Metrics

Max
Spend