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Contractors soon realise that their new found earnings can stretch to a sizeable mortgage. You may be a first-time buyer or want to move up the property ladder. Either way, you’re keen to know how much you can borrow based on your contract.
We’ve designed our contractor mortgage calculator to answer that question. It’s not only about the size of your mortgage that matters, though.
You also have to consider how you’ll meet the monthly repayments. If you’re a top earner in your industry, Stamp Duty may also be a concern for you.
As such, we offer you quick and easy ways to find out:
- how much you can borrow based on your contract rate;
- what your monthly mortgage repayments will be, based on:
- the amount you borrow;
- the interest rate your lender charges;
- the mortgage term, how many years you take out the mortgage for;
- how much stamp duty you’ll have to pay, if applicable.
How much can I borrow using my contract earnings?
Before you begin house-hunting, you need an estimate of how much you can borrow. The last thing you want is to find the home of your dreams, but not be able to afford to buy it.
Our contractor mortgage calculator can give you that ball-park figure in a trice. First, it works out your ‘annualised’ contract income, based on your input. And then apply the (often exclusive) terms we’ve negotiated with various lenders.
Like I say, that’s a rough guide. Every contractor’s circumstances are different. For a more accurate mortgage quote, you can speak to our experienced advisors.
They’ll take your information in much the same way. But rather than a generic output, they can drill down into specifics.
They’ll align your details with the best offers from our contractor-friendly mortgage lenders. Once they find a great match, they’ll get back to you with a firm offer.
Calculating mortgage repayments
Applying for a mortgage is only advisable if you can afford the repayments. If a lender rejects your application, it can have dire consequences.
Failed searches leave tell-tale footprints on your credit file for all to see. So it’s a good idea to work out how much you afford each month before you apply.
That’s where our repayment calculator will prove invaluable to you. Not only does it return a repayment option, but interest-only mortgages, too. It’s important you have the choice.
Our mortgage repayment calculator couldn’t be easier to use; enter:
- the size of the mortgage loan you need to borrow;
- the interest rate the lender will charge;
- use a contractor mortgage “Best Buy” table to get the best of the current rates;
- the number of years you want to take out the mortgage for.
Stamp Duty – do you need to pay it?
Unless you buy your home for less than £125,000, you will pay stamp duty. These are the official rates from HM Government (December 2014), for residential properties:
- £0-£125,000 = 0% (of the property price);
- £125,001-£250,000 = +2%;
- £250,001-£925,000 = +5%;
- £925,001-£1.5M = +10%;
- £1.5 million, +12%.
These are not flat fees, though. You apply the amount of duty in stages.
For example, say the home you bought was £440,000. You don’t pay a straight 5% on the £440,000 because the sale price falls in that bracket.
Instead, you’d pay:
- nothing on the first £125,000;
- 2% on the next £125,000 (so, £2,500);
- (this takes you up to £250,000 of the value);
- and then you’d pay 5% on the remaining £190,000 (£9,500).
The grand total of Stamp Duty would be £12,000 on that basis. It can become complicated and expensive if you get this bit wrong.
It’s much easier to enter the ‘for sale’ price of the home into our Stamp Duty calculator. Like all our services, the calculators will do the heavy lifting for you.
Applying for a contractor mortgage can become an ordeal without the right help. We’ve put the tools in place to give you an idea how much one will cost. When you’re ready to get a firm offer, you’ll find us handy at that, too. Happy house-hunting!