When you’ve never owned a property before, it can be a bit of a minefield when you are trying to work out whether you will be able to afford the monthly repayments on a mortgage as well as all of your other bills.
Ideally, you don’t want your mortgage to exceed more than around 28% of your household net income. But what about your other bills? It’s important to consider how much spare cash you’d like to have each month before you take out a mortgage with a lender. Think about whether you are going to be buying with a partner, and whether you could still afford the mortgage if one of you no longer wanted to work, or wanted to dedicate some time to raising a family or pursuing a passion project.
So let’s dive into how to calculate your monthly bills…
Use a monthly mortgage payment amount calculator
Use a monthly mortgage payment calculator to determine what your monthly repayments are going to look like. By using an online calculator you can take into consideration the down payment, the interest rate, and the mortgage term to get the most accurate results.
You can also use the calculator to change the interest rate, and determine whether you could still comfortably afford the repayments even if the interest rate went up.
Check council tax payments for the area
You can check what your council tax bill is likely to be by heading to the gov.uk website and checking what council tax band the property will fall into. All you need is the postcode of the property, and you will be able to see how much you will likely be paying for your council tax bill each month.
These payments can vary wildly based on where the property is located, and how many bedrooms it has, and ultimately the value of the property. The higher in value your home, the higher your council tax bill will be.
Review your energy supplier
It is now easier than ever to switch energy suppliers, and you can find out the most favourable rates by going onto a price comparison website and entering the postcode of the property. The price comparison website will then show you the utility company which has the best rates for energy in your area. (You can also do this for other bills such as broadband).
This will give you an idea of how much your monthly bills will be, and will also give you some insight into which energy suppliers you could switch to in order to get the best deals on your bills. You should be able to make the switch pretty sharpish as soon as you move into the property.
So that concludes some top tips on how to calculate your monthly bills before you become a first time buyer and purchase your first home. Remember to make use of handy online calculators, price comparison sites, and also any information you can get on the property using the postcode.