What is the current mortgage interest rate?
Mortgage calculators requires an interest rate, so how do I know what that would be? Does it vary based on the property and other factors? Is it possible to get a rough value to use in calculators?
The interest rate charged will depend on a whole lot of factors: how big a percentage you wish to borrow, your credit history and so on. The range is from about 3% (or just a little under) to 6% or more. Just as a starter, I suggest you use 4% if you are borrowing under 75% and 5% if you are borrowing up to 85%, with 6% if you intend to borrow 90% of the purchase price.
But this is just a rough guide! | 01.12.11 @ 17:03
Lenders that operate an underwriting method based on mortgage affordability will publish (sometimes) the rates that they use to assess whether or not they think you can afford the loan and this is irrespective of whether you are applying for a cheaper deal.
the common rates are 6% and 7% so i would strongly suggest you use those figures as well as the indicative rate for the deal you are wanting to apply for.
lenders have a responsibility to take steps to ensure that you can afford the mortgage for its entire term so if you are applying for a 3 year fix of 3.5% but on a 25 year mortgage term they will still apply the 7% rate for affordability as no one knows what the standard rate would be after the fixed rate expires and you might not be in a position to switch to another lender.
therefore the lender has to make its assessment on the entire term you want and not just the "deal" term.
this does differ significantly from David's answer above but sadly i can assure you that for 9/10 lenders it will hold as true. | 01.12.11 @ 21:24
As a 1st time buyer with a 10% deposit, try 5%. If you are an exiting buyer with 10%+ try 4% | 01.12.11 @ 22:00
click on the "more" on my response above as you will understand why the rates i have mentioned are higher! | 01.12.11 @ 22:07
Perhaps some confusion, here! In fact, I think that two different questions have been answered. Paul and I have suggested the kind or rate you might wish to put into a mortgage calculator, and Darren has given a different figure: that which lenders are likely to use when assessing how much they are prepared to offer.
The amount you would have to pay are probably closer to the figures given by Paul and me - so those are the rates you could use when deciding how much a mortgage might cost you. However, in calculating longer-term affordability lenders do frequently use higher rates, the point being that the lenders want to build in a cushion for when (not if) rates do rise.
So it is not just the current rate you should consider, but the rate at the end of the 'special' period, and add two or three percent to give you a little headroom. | 01.12.11 @ 23:03
Thanks for all the help everyone, this will definitely help me in my flat research! | 01.13.11 @ 11:09