Stamp duty is a levy the government imposes on all sales of properties valued above £125,001. In addition to the stamp duty, there is a 3% charge on residential properties valued above £40,000 for second-time buyers. However, it does not apply to first-time homebuyers purchasing properties valued below £500,000.

Deposit

The deposit is the initial money you commit towards purchasing the property. In most cases, one needs to have around 10 to 20% of the price to qualify for a mortgage.

Valuation fee

Most mortgage firms charge a fee for assessing the value of the property you intend to buy before committing to a financing arrangement. The cost depends on the value of the property but rarely exceeds £1,000. Some firms do not charge fees for certain mortgage arrangements.

Surveyor fee

The surveyor is the agency that values the property and gives a price recommendation. They identify structural flaws and other defects that affect its value. Survey costs can range from £200 to £600, depending on the type of valuation. It is advisable to pay for a structural assessment as that may save you money in the long run.

Legal fees

Buying property requires the services of a solicitor to navigate all the legal jargon and intricacies of contract agreements. The lawyers will also conduct local searches on the location of the property to see if it complies with area plans. You will need to hire a licensed conveyor to guide you through this process. Typically, legal fees range from £700 to £1,500 inclusive of VAT

Mortgage costs

The mortgage arrangement includes several administrative costs as well as the actual financial package. The auxiliary charges include valuation, booking and arrangement fees. You should opt to pay the fees upfront rather than having them accrue interests by adding them to the package.

The mortgage cost depends on the type of product you choose. Most financiers have multiple products for different customers depending on variables such as income stability and the deposit. When selecting a package, pay attention to the fees and other charges that may increase the overall cost even though the initial cost may be low.

Insurance

The financier will require you to take insurance packages that will protect their investment from risks such as loss of income, death and damage to the property. Taking insurance will also protect you and your family from losing the home in case of adverse events that may force you to default on payments.

Before starting the formal process of acquiring your dream home, it is important to get a rough idea of the type of property you can afford. The calculator will help you determine the amount of money you can spend on the investment. All you need is to complete a quiz asking four easy questions about your finances. The calculator will use the information to provide an estimate of the funds you need to allocate for property purchase.

How the tool works

Start by entering the amount of funds you have as deposit. The deposit is not limited to cash in your bank but includes other financing options and equity for properties in your possession. Next, provide details about your salary and that of your spouse.

If you are not sure about the value of your properties, use our property valuation tool to get an estimate. After entering all the details, the calculator will determine the amount of money you can borrow through mortgages. It will add this figure to the deposit to produce the total budget.

Wrapping it up

Most mortgage calculators have complex metrics that are hard to interpret without professional support. They can make the budgeting process overwhelming, but our budget calculator is quick and easy to use even for home buyers with limited financial literacy. Ours is purely a financial estimate app that does not affect your credit ratings