ABC FinanceHomeowner LoansCalculator

Free Homeowner Loan Calculator

Get a homeowner loan with a low, fixed £1,495 broker fee

Author: Gary Hemming CeMAP CeFA CeRGI CSP

20+ years experience in homeowner loans

Find the best UK homeowner loans and calculate your potential monthly repayments using our homeowner loan calculator. Our calculator allows you to input your desired loan amount, loan term and interest rate to find out your potential monthly payment.

If you’re looking to calculate your monthly costs, compare interest only vs capital repayment or work out how much you could afford to borrow, get started now. Alternatively, find out how to get a homeowner loan.

What is a homeowner loan?

A homeowner loan is a type of loan that allows you to use your home as security for borrowing. By offering the lender security, you can benefit from a higher loan amount, lower interest rates and the ability to borrow over a longer term.

Homeowner loans are often used to finance the following:

  • Home improvements
  • Debt consolidation
  • Funding property investment
  • Paying for a wedding
  • Paying for a holiday
  • Purchasing a new car
  • Paying tax bills
  • Clearing adverse credit such as an IVA or CCJ
  • To inject capital into a business
  • Paying school tuition fees
  • Extending the lease on a property

How much can I borrow with a homeowner loan?

When taking out a homeowner loan, you can borrow anything from £10,000 with no set maximum loan size. Your maximum loan will depend on your income, outgoings, the amount of equity you have in your property and your current loan to value (LTV).

The first step in understanding how much you can borrow is to use our calculator and consider the maximum affordable monthly payment. Once you know this, you will know the maximum loan size, term and interest rate that you can afford.

At this stage, contact our team of experts who will be happy to run through your personal circumstances and let you know which lenders could meet that requirement. Each lender has its own homeowner loan process, interest rates, method of calculating affordability and maximum loan to value (LTV) requirements.

What can be used as security for a homeowner loan?

The following can be used as security for a homeowner loan:

  • Houses
  • Apartments
  • Flats
  • Cottages
  • Bungalows
  • Flats
  • Holiday properties
  • Self-builds
  • Converted properties
  • Buy to let property
  • Business (commercial or semi-commercial) properties (in some cases)

How are homeowner loan repayments calculated?

Homeowner loans are calculated in the same way as mortgages, using a compound interest calculation. The formula can be calculated using the following numbers:

r = Annual interest rate (APRC)/12 (to indicate the months)

P = Principal (starting balance) of the homeowner loan

n = Number of payments in total: one mortgage payment every month for 25 years would be 25*12=300

Here’s the formula in full:

Compound interest formula
Compound interest formula

While this may seem very complicated, our calculator handles this calculation for you and gives you the figure instantly.

Interest only homeowner loans are far easier to calculate. The formula is simply the loan amount multiplied by the interest rate, divided by 12 (for 12 monthly payments). For example, a £75,000 homeowner loan at an interest rate of 4% would be the following:

75,000x4% =£3,000

Then divide this figure by 12, so £3,000/12 = £250.00 per month

Again, our free tool can handle this instantly and will give you results without having to calculate the figures manually.

Can I get a homeowner loan with bad credit?

Yes, you can get a homeowner loan even if you’ve got bad credit, they are known as bad credit homeowner loans. We can consider applications from borrowers who have previous mortgage arrears, defaults, CCJs, IVAs or bankruptcy. If your credit score is below average, you won’t qualify for every product. In this case, expert advice should be sought rather than looking at interest rates online. This will ensure that you get the most accurate possible terms based on your circumstances.

Want help finding your perfect solution?

Request a callback from our team of experts at a time convenient for you.