Minimum and maximum mortgage borrowing

Some mortgage providers have minimum and maximum amounts of money that they will lend you for a mortgage.

Mortgage loan to value

This is the ratio between amount of the mortgage and value of property. So, for example if you want a £90,000 mortgage on a property valued at £100,000 the loan-to-value you require is 90%. Some mortgage lenders have limits on these.

High lending charges

This is a fee that is used to buy insurance to protect the mortgage lender if you borrow more than a certain amount. Many mortgage lenders will lend you up to, say, 90% of the value of a property without this fee. But if you want to borrow more, the lender usually needs you to pay for insurance to ensure that it will get all of its money back if the property has to be sold for less than the amount of the mortgage. It must be noted that the insurance company will take recourse against the homeowner even though the provider is compensated for the shortfall.

Mortgage rate

It is worthwhile shopping around to make sure you are getting a good deal for your mortgage. Rates do vary and this can make a big difference to how much you have to pay each month.

How much can you borrow

Most mortgage lenders base the amount they will lend you on how much you earn. For any mortgage the lender will assess how much they will lend you based on your income and outgoings.