Borrowing and getting advice
How much can I afford?
To work out how much you can afford, write down what money you have coming in and take away what you spend each month. Ignore any rent or other payments that would stop once you own your own home, but add in anything new that you may have to pay, such as buildings insurance, water rates or additional travel costs from your new home.
You can also use our mortgage calculators to work out how your mortgage payments will be affected by any changes in interest rates. Once you’ve worked out roughly how much you can afford to pay, get detailed illustrations from lenders or a mortgage broker before committing yourself.
Don't overstretch your budget!
It may be tempting to borrow as much as possible when the initial cost is manageable, but you could get into difficulties and lose your home if you can’t keep up your repayments.
Budget for increased costs in future
If you take a variable rate mortgage be prepared for your monthly payments to go up when interest rates rise.
If you have a low initial fixed rate or a discounted mortgage, allow for the increased cost when your interest-rate deal comes to an end. Don’t forget to allow for the possibility that interest rates may have risen over this period as well.
If you have an interest-only mortgage which then converts to a repayment mortgage at a specified time, be prepared for a big jump in your monthly payments.
For more information, see keeping up your repayments.
Don’t borrow the maximum you can afford now. Allow some headroom in case interest rates rise in future.
How much can I afford?
Why use an APR?
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How long should the mortgage last?
What if I have a poor credit history?
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