How to apply for a mortgage online

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Fact Checked.
Updated on
November 16, 2022

In a nutshell

It’s super easy to apply for a mortgage online – start by using an online mortgage broker – they’ll find the best deal for you, and take care of the whole application process too. They’re whole-of-market, great customer service and sometimes even free!

Nutty

Getting your mortgage online is super easy, and highly recommended. No more waiting on hold or arranging face-to-face meetings in the middle of the day to suit a mortgage advisor – everything runs to your schedule. You can sort your mortgage whenever you like, even on the sofa in front of the TV!

How to apply for a mortgage online

By the way, you can even switch deals online too (called remortgaging) – in fact, it’s even easier and quicker than getting the mortgage in the first place.

Ready to get your mortgage online? Here’s how to do it in a few simple steps. Let’s go!

Step 1: get an idea how much you can borrow

If you’re not sure how much you can roughly borrow for a mortgage yet, that’s your first step. You need to know you can actually borrow enough to get the property you want.

To get a rough idea of how much you can borrow, take your total yearly income (e.g. your salary) and times it by 4.5. So, if your salary is £30,000 per year, you’ll be able to borrow around £135,000 with a mortgage.

How much can you borrow for an online mortgage?

However, how much you can actually borrow depends on your deposit (among other things). You’ll normally need at least 5% deposit to buy a property, which means if you have a low deposit, for instance £5,000, you’ll only be able to buy a property worth £100,000, even if your income means you can borrow more.

Get a more accurate borrowing figure

Although a rough figure is good, you can also use a mortgage calculator to get a more accurate figure of how much you can borrow. You can do it online and only takes a few minutes. Our favourite is Habito’s mortgage calculator¹ – it's pretty accurate and fast.

Habito’s online mortgage calculator

Want to borrow more than you normally can?

If you want to borrow more than 4.5 times your income, you might be able to do this with a guarantor mortgage, or a joint borrower sole proprietor mortgage. This is where your parents, or another close family member can help support your mortgage application too. And, maybe even increase your deposit so you can borrow more.

Guarantor mortgage

Your best bet is to speak to a mortgage broker who can advise on all of your options. We recommend Habito¹ – they’re free and of course online!

Step 2: work out your loan-to-value

Once you know how much you can borrow, and your deposit, you’ll be able to work out your loan-to-value (LTV). That’s the amount of money you want to borrow (the loan), vs the value of property. For instance, an LTV of 90% means your mortgage covers 90% of the property.

Loan-to-value

Your LTV is important because it will determine what interest rate you’ll get for your mortgage, which will also give you a good idea of how much you’ll be paying in mortgage repayments each month (we’ll cover this later).

To work out your LTV, you simply add your deposit to your borrowing amount (mortgage), and then divide your deposit by that total amount. Then take that figure away from 100%. That was confusing wasn’t it? Here’s some steps to follow instead:

  1. Add your deposit (say, £34,000) to your borrowing amount (say, £100,000 mortgage) to get the total (£134,000).
  2. Divide your deposit (£34,000) by that total (£134,000), this gives you 25%.
  3. Take that number (25%) away from 100%. Giving you 75%, (100 - 25 = 75).
  4. That’s it! Your loan-to-value (LTV) is 75%.

Oh, and mortgage providers will only work in either 5 or 10s when it comes to LTV, so you’ll need to round your figure up to the nearest 5 or 10. For instance, if your LTV is 74%, it will become 75% for a mortgage.

Remortgaging?

If you’re remortgaging, instead of buying a home, you’ll need to work out how much ‘equity’ you have in your home, rather than the deposit. This is how much of your own home you own yourself, rather than how much is effectively owned by the bank with the mortgage.

Mortgage equity

It’s simple to work out your equity, first take the current value of your property, and then take away the remaining mortgage amount. So, if you have a home worth £300,000 and your mortgage is £250,000, your equity is £50,000 (£300,000 - £250,000).

Find the best mortgage online for free

Habito are free, online, search every mortgage deal, and have great service.

Visit Habito¹Visit Habito¹

Step 3: compare deals online

Right, now is the time to see which mortgage you can actually afford, and how much your monthly repayments will be if you borrow the amount you would like to. To do this, we’ll look at current mortgage deals out there.

So grab your borrowing amount and your LTV and head over to a mortgage comparison table¹.

Online mortgage comparison table

This will give you an indication of what a real mortgage would look like, using your own information. It will show:

  • The mortgage repayments each month
  • The interest rate
  • How long the initial deal is for (more on this below)
  • How long the mortgage is for (the mortgage term)
  • Fees the lender will charge (if any)
  • The overall cost of the mortgage

Don’t apply for anything yet though! You only want to get a rough idea of what you can afford, after this, we’re going to use the experts to find the actual best deal for you. All online too. (We’ll cover that in later steps.)

How long the initial deal is for

With the most common types of mortgages, there will be a ‘fixed rate period’, this is where the interest rate is fixed for a set number of years at a lower rate, normally 2 or 5 years. After this, it will increase to the mortgage lender's standard variable rate (SVR), which is their ‘normal’ rate, this isn't fixed and your repayments can change.

Fixed-rate compared to a stand variable rate (SVR)

Overall cost

As most mortgages will have a fixed rate period, with a cheaper rate at the start of the mortgage, it means you only need to compare the total cost of the mortgage during this period. 

Why? Because you should get a new mortgage when this deal ends – you’ll remortgage (switch deals) to a brand new mortgage with a new lower rate than the expensive SVR. You’ll potentially save £100s per month by doing this, and highly recommended.

However, looking at the interest rate alone for your mortgage and the fixed rate period can be misleading. Mortgage lenders (the people who give out the mortgages), often reduce the interest rate but increase fees (called arrangement fees) to get their mortgage to the top of a mortgage comparison table. Very cheeky!

So, you need to look at the interest rate and all the fees together when comparing mortgages, to really work out which deal is the best. But don’t panic, there’s a much easier way to do this, without doing much yourself – use an online mortgage broker.

They’ll find the best mortgage for you, and handle the whole application process. Plus, some are even free too. Our recommendation is Habito¹. In fact, that’s the next step.

Step 4: find an online mortgage broker

A mortgage broker (also called a mortgage advisor), is someone who finds the right mortgage for you. The good ones compare all the mortgages to get the best deal – and there’s a lot – over 20,000 from over 100 mortgage lenders!

Mortgage broker

Plus, they’ll handle all the paperwork and the whole mortgage application process too. You don’t need to do a thing!

Well, all you need to do is find the right mortgage broker for you. And best of all, some mortgage brokers are online, so you can apply for your mortgage online too! Oh, and did we mention some of them are even free?!

Make sure they’re an independent mortgage broker

There’s one very important rule when it comes to choosing a mortgage broker. They need to be able to search the ‘whole market’. That’s the whole mortgage market, and means they can search every deal out there to find the right one for you. If they can’t do this, you can’t be sure you’re getting the best deal, and can mean you’ll end up paying much higher monthly payments than you need to.

Whole-of-market mortgage broker

Some mortgage advisors can only search a handful of lenders, and some advisors can only search their own mortgages – for instance, mortgage advisors who work for a bank. You don’t want to use any of these.

Nuts About Money tip: never use your online banking website or app to get a mortgage. You’ll most probably never get the best deal for you.

So, we’ll say it again, only use a whole-of-market broker!

How a mortgage broker works

To find the best deal for you, a mortgage broker will first need to understand a bit about you, and your personal and financial circumstances. So, they’ll need to know if you’re a first time buyer, so buying a home for the first time, moving home, or remortgaging to a new deal. Or, even looking for a buy-to-let mortgage. Plus, they’ll need to know about the property you want to get a mortgage for – or a rough idea of how much you want to borrow.

Using a mortgage broker is more than simply finding the cheapest mortgage. They’ll also find the right mortgage for you in general, and there’s quite a range out there! The main types of mortgages are:

  • Repayment mortgage: this is your typical mortgage where you pay some of the mortgage and interest off each month.
  • Interest only mortgage: this is where you simply pay the interest each month. You’ll have to pay the mortgage off in full at the end of the mortgage term.
  • Fixed rate mortgage: this is where your interest rate is fixed for a period of time at the start of the mortgage (normally 2 or 5 years).
  • Variable rate mortgage: this is where the interest rate can change depending on what it’s linked to, which is normally the Bank of England base rate.
  • Discount rate: this is a discount below a higher rate, for instance, a discount from the lenders standard variable rate (SVR).
  • Offset mortgage: this is where your savings can reduce your monthly repayments or even pay off the mortgage quicker.
  • Guarantor mortgage: this is where your parents or close family members can help you get a mortgage or borrow more by putting their name to the mortgage too.
  • And more.

Find the right mortgage lender

Finding the right mortgage for you also means finding the right mortgage lender. There’s over 100 in the UK and lots of them are suited to different types of customers. And, they all have their own lending criteria – that’s their set of rules for who they’ll lend to and how much.

For instance, some lenders don’t like self-employed people, and others love them! Some lenders don’t like people with a low deposit, and again others love them.

A mortgage broker will know what lender is right for you, to give you the best chance of getting a mortgage in the first place, and to borrow as much as you’d like to.

If you do apply to the wrong lender, and you get rejected, it can negatively affect your credit rating, which could make it harder for you to get a mortgage afterwards.

Legal protection

Using a mortgage advisor also gives you legal protection. Mortgage brokers are authorised and regulated by the Financial Conduct Authority (FCA), which means they must give the right advice for you and your circumstances.

Financial Conduct Authority

If you do end up on the wrong mortgage for you (unlikely), you’ll be able to get compensation as part of the Financial Services Compensation Scheme (FSCS).

Mortgage broker fees

Finding the best deal, and the right mortgage for you, plus all the paperwork and handling everything for you. Sounds expensive? Actually, it’s pretty reasonable, and some online mortgage brokers actually fee free!

Typical fees for mortgage advice are around £500, and a bit more if you’re looking for a specialist mortgage, such as a guarantor mortgage. Although the free ones are just as good, if not better, and often online too – making things way easier for you.

Online mortgage broker fees

To guarantee the best mortgage for you, and for them to handle everything for you, we think it's a pretty reasonable price, and if there’s no fee, then even better! The main thing to be conscious of is whether a broker can search the whole market or not – only use one who can.

How to find the best online mortgage broker

There’s a few mortgage brokers out there who can help you get your mortgage online. And the good news is, we’ve done the research to find the best mortgage brokers for you.

The best online mortgage broker is:

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Best overall

Habito

Habito will find the best mortgage for you, all for free, and with great service. But better than that, if you’re buying a home, they’ll handle the whole process for you – that’s the legal work and survey, and everything else. It’s a huge stress and time saver, and comes at a great price. Highly recommended.

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Habito rated 5 stars

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If you want to see the full range of options and learn more, check out the best online mortgage brokers.

By the way, you don’t have to get your mortgage online if you don’t want to. There’s still lots of traditional mortgage advisors out there. In fact, we’ve got our own find a mortgage advisor service to help you find a whole-of-market mortgage advisor near you.

Step 5: get an online mortgage agreement in principle

Picked your online mortgage advisor and ready to roll? Great. Now, the next step is getting a mortgage agreement in principle with your broker. Don’t worry, it’s quick and easy. There’s also not much left to do after this.

A mortgage agreement in principle is a document that proves you’re able to get a mortgage. It will show how much you can officially borrow, and often will show the monthly repayments and the interest rate, plus all the other little details you need to know.

Mortgage agreement in principle

This step is super important as you want to know if you can actually get the mortgage before you make a full mortgage application – as it could negatively affect your credit rating when they carry out credit checks, so you want to be as sure as possible before applying.

A mortgage lender might do a ‘soft credit check’ at this point, which is just to check your credit rating, and doesn’t affect your credit score in future.

Credit score while applying for a mortgage online

Plus, if you’re buying a home, estate agents often ask for this before they start showing your properties. It’s not a legal requirement, but it shows you’re a serious buyer.

You don’t need to do anything here really, your broker will handle everything. Although if you want to get a super quick mortgage in principle online that’s a bit more basic, and perfect for estate agents, check out Habito’s mortgage in principle tool¹. You’ll have one in just a few minutes.

Habito’s online mortgage in principle

Step 6: apply for your mortgage online

And finally, what you’re here for – to get the mortgage! Once you’ve found your lovely new home, or the best new mortgage deal for you if you’re remortgaging, all you need to do is let your mortgage broker know you’re ready to apply.

They’ll take care of everything, all the paperwork, and all the communication with the mortgage lender – even chasing them up (they can be slow at times). The only thing you’ll need to do is provide things like bank statements and payslips to prove your income and identity.

At this point the lender will also do a ‘hard credit check’ which is a more rigorous credit check to make sure you don’t have poor credit history and everything is in good shape. They basically need to make sure you can make the mortgage repayments every month.

After a while, you should hear back that your mortgage provider is happy to give you the mortgage, and give you a formal mortgage offer. Congratulations!

Online mortgage broker

Pretty easy applying for a mortgage online isn’t it?

Final steps

All that’s left to do is sort out all the legal work, you’ll need a solicitor or conveyancer (legal people who just deal with property), and to arrange a surveyor to check everything is in order with the new property (that it’s not falling down!). And then you can ‘exchange contracts’, which is finalising the deal, and move into your new home!

You can either do this yourself, or if you’re using the online mortgage broker Habito, they can actually handle all the legal work and surveys for you, which saves quite a bit of time and stress! Anyway, it’s worth checking out. Learn more about that on the Habito website¹, or check out our Habito review.

After that, it's a waiting game for everything to move along, but hopefully you’ll soon have the keys to your new home!

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Find the best mortgage online for free

Habito are free, online, search every mortgage deal, and have great service.

Visit Habito¹Visit Habito¹
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This article has been fact checked

This article was written by the team at Nuts About Money, and fact-checked by 2 independent reviewers. You’re in safe hands.

Find the best mortgage online for free

Habito are free, online, search every mortgage deal, and have great service.

Visit Habito¹Visit Habito¹

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