Buying your first property and choosing the right mortgage can be rather daunting, so contact us and we’ll advise you on the mortgage options available to you.
But in the meantime, we hope you find the following information useful.
The amount of mortgage you can get depends on your income. Income multiples do vary. As a rough guide, a typical multiple is four times your income. This figure could be higher or lower depending upon your individual circumstances and different lenders’ criteria. Some lenders do not use income multiples at all and will lend based on affordability.
Once you add to this the amount that you can afford to pay as a deposit, you have the amount you can pay for your first property.
It is also worth remembering the additional costs, on top of your deposit and mortgage that you will be expected to pay.
For example, you will have to pay stamp duty:
You usually pay Stamp Duty Land Tax (SDLT) on increasing portions of the property price above £125,000 when you buy residential property, for example a house or flat (not a buy-to-let property or second/ holiday home).
However, there are different rules if you’re buying your first home and the purchase price is £500,000 or less. You can claim a discount (relief) so you do not pay any tax up to £300,000 and 5% on the portion from £300,001 to £500,000.
You’re eligible if:
|Property (or lease premium or transfer) value||SDLT tax|
|Up to £125,000||Zero|
|The next £125,000 (the portion from £125,001 to £250,000)||2%|
|The next £675,000 (the portion from £250,001 to £925,000)||5%|
|The next £575,000 (the portion from £925,001 to £1.5 million)||10%|
|The remaining amount (the portion above £1.5 million)||12%|
See the Stamp Duty Land Tax Calculator to work out how much Stamp Duty you’ll pay.
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In addition, you will have to pay for the survey and the valuation on the property, plus solicitor’s fees. You may also have to pay an arrangement fee for the mortgage.