How to work out mortgage repayments - and why you should before buying your first home

One of the biggest mistakes I’ve seen buyers make over the years is not working out how much their mortgage repayments will be before they go looking at properties.

One of the most common things that a lot of first time buyers do is fall head-over-heels in love with a property without considering all the factors involved; like interest rates, charges, legal fees or their monthly outgoings.

Buying a house is probably going to be the biggest purchase of your life, so you want to get it right and you don’t want to be tying yourself in to something that you’ll struggle to maintain in the long term.

Why it’s important

When you buy a house, it is very important to make sure that you have given some thought about your finances both now and in the future. You can’t always be sure your circumstances will stay the same, but you should be as certain as you can that no matter what happens, you can still pay your mortgage each month. If you are planning on a career change, starting a family, or even taking out finance to buy a new car all of these things need to be considered before you start your house hunting.

So as tempting as it might be to overstretch yourself for your dream home, you need to be realistic about what you can comfortably afford to commit to repaying. If you do overstretch yourself at best your lifestyle will suffer, at worst you could end up falling into arrears and losing your home.

Use a repayment calculator

Using a simple calculator will give you a better idea of what you’re likely to be paying back each month. The L&C repayment calculator works by allowing you to adjust the figures for the following:
  • The amount you want to borrow
  • The interest rate
  • Number of years you want to borrow the money over
Remember it’s not just about the mortgage payments alone, you also need to consider things like your monthly bills, costs for insurances such as home and contents and life insurance as well as day to day living expenses. Our first time buyer guides will give you more helpful tips on what to expect.

Speaking to an expert

I’d always advise speaking to a professional for advice before applying for a mortgage. Here at London and Country we offer fee free, expert advice. So there’s no reason to rush into anything without being fully aware of what you should be paying and it’s well worth speaking to one of our qualified advisers on 0800 953 0304 (or 0330 303 0036 from your mobile) before you start house hunting.

You can inform them of your monthly salary, any other household bills or payments as part of your outgoings, and then they can advise you how much you can borrow, within your budget so you can stick to this when looking at potential homes.

This will help keep your property search narrowed down to what you know you can realistically afford, and stop you from overstretching yourself before you've signed on the dotted line.

Points to consider

Don’t forget that when you’re looking for the perfect house, you should also be taking into consideration the other costs associated with buying a house such as; solicitors’ conveyancing fees; mortgage arrangement fees; surveyors; home insurance; and any extra costs for building work; rewiring or any other jobs that might need doing to your new home, especially those that are unexpected, but can appear out of the blue once you move in.

Whatever you do, don’t fall into the trap of forgetting that unfortunately things can, and sometimes do go wrong when you’re moving so it’s best to have a contingency plan, and try to make sure you always have a bit in the pot to cover any extra or unforeseen costs. A mortgage is something that allows to have the security of owning your own home – it shouldn’t be giving you sleepless nights.

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