The short answer: because you are unlikely to have the "standard" background that suits a one-size-fits-all mortgage calculation from a mass lender.
How does a loan calculator determine a mortgage?
The vast majority of the mortgages arranged in the UK are underwritten in a rigid and controlled fashion. Most lenders have strict lending criteria that dictate precisely how and where they lend. If you meet 100% of the lender's requirements, you will get a mortgage. If you fall short in even one area, you won't be approved for a mortgage. There is very little flexibility or negotiation involved.
It's important to underline that there is nothing wrong with this process. The UK has a highly evolved lending system that allows for an efficient mortgage market. This system also enables lenders to keep up with the UK's fluid and active property market. It also allows for much more capital to be employed into the market in a predictable way. Lenders can also securitise and sell off loan books transparently. The result is that mortgage rates remain low, competition is high between lenders, and around 95% of mortgage borrowers can enjoy a great outcome if they want to buy a property.
Because lending criteria are so predictable, lenders can create robust lending decisions they can easily anticipate through calculators and online forms. You enter all of your details and submit a form. The lender makes an automatic calculation and then instantly delivers a lending decision detailing how much you can borrow. The process is so predictable that in many cases, lenders will be able to detail down to the penny how much you will be able to borrow.
The "underwriting" process then follows. The lender will verify the information you have entered by requesting documentation from you. Payslips and bank statements are standard. They will also check information stored in credit reference bureaus. If the lender doesn't find any red flags and the valuation of your property holds up, you get a complete mortgage offer. If you enter information which the lender can't verify (say you enter your bonus income incorrectly), the firm will re-calculate and adjust their offer accordingly.
The underwriting process applies to heavily regulated residential mortgages (loan-to-income multiples are also highly controlled). Buy-to-let mortgages (where the loan amount is based on commercial factors like the property's rental income) also follow the same process.
At Enness, we know all the lenders in the market. We also have access to every mortgage lender criteria and mortgage calculator. We process hundreds of millions of pounds worth of mortgages a year, and it would be easy for us to put together our own mortgage calculator. We could analyse the information provided by our clients and give predictable mortgage offers in return. Most of this could be built on the front end of our website and powered by an excel database.
So why don't we put a mortgage calculator on our website? Here, we detail the reasons we haven't done this and why we won't ever put a calculator or form on our website:
You may have exceptional circumstances that a mortgage calculator won't take into consideration
You possibly do not fit "neatly" into the box that most lenders will want you to conform to before they can consider granting you a mortgage. Your income may be complex, in multiple currencies or from many sources. In other cases, you may not have any income at all - this isn't an unusual scenario for us, and we know which lenders you can approach in such a situation. Alternatively, you may be an entrepreneur, founder or you may have exited a business, and your wealth may be diverse and spread internationally. Possibly, you already own one or more valuable properties, and you may hold them through complex structures. If you need refinancing or want to buy a property quickly for an urgent need, we also know the best lenders to turn to - very few mortgage calculators can cater to this level of precision.
You need a lender who will look at the bigger picture, not just your payslips
Income multiples only really apply to the mass mortgage market. You'll have heard that lenders are usually prepared to lend 4-5x your income, but this is high street talk and doesn't apply to the top of the market or large mortgages. Your mortgage should be affordable: this should never be in dispute. However, what will constitute affordability in your scenario doesn't only need to be based on your monthly salary.
Some lenders will consider director's loans, retained profits, capital gains, trust income, investment income, joint mortgage sole proprietor, HNW exemptions, overseas occasional use exemption, rolled up interest, pre-paid mortgage, AUM, cash burn etc.
You may also find it makes sense to approach a lender who will look at the bigger picture, including factors like your family wealth, your CV etc. We know the lenders who will make a lending decision based on all your circumstances, not just a snapshot of your situation.
Mortgage calculators don't account for the bigger picture, but at the top of the market, context matters
Are any of the below familiar?
"My tax return shows my income was £3.50 this year."
"My limited company made a loss last year."
"My business has only been trading for nine months."
"I just sold my business, and now I no longer have an income."
"I run a business in Dubai and don't need to prepare audited accounts."
"I have £100m in cash but no income."
At first glance and viewed in isolation, getting a mortgage would be challenging if you have a scenario similar to any of the above. However, these statements only look at part of the picture. Taking a broader approach, there may be no reason why all of these points can't be qualified or mitigated.
You will want to work with a high value mortgage broker who knows how to look at the broader context of your situation and identify how to help a lender find comfort. When we have the complete picture, we will know which of the 500 lenders in our network will enable your mortgage.
You want a lender who is committed to finding a path forward and helping you borrow
Almost all banks want to lend money: it's a central part of their entire existence. Some banks want to lend as much as they can within their pre-defined criteria. Other banks want to lend to attract high calibre clients who will then become customers of their institution.
You will find that the latter will often go out of their way to find lending solutions. They will bend their lending criteria, make exceptions, negotiate and, in some cases, knockdown walls to get the job done. They do this because they know that in solving your problem, especially when it's an emotional "life event", you are more likely to become a loyal client for life. Enness likes working with the firms that go all out for their clients, and we know which lenders will make things happen for you.
You are looking for one-to-one service and attention to detail
You are likely to want a personal and one-to-one service. Human advice, being listened to and having things explained are also important. You will also want to discuss nuanced scenarios, compare different options, and ask questions that are specific to your situation. Mortgage calculators give generic, tick-box answers or figures without offering any added value or a personal touch, which is another reason we don't have one on our site.
You'll be tempted to fill in mortgage calculator forms or based on what you think the lender wants to know
We're absolutely not here to judge, and we understand why this happens. When filling in a form for a mortgage, you may be tempted to generalise, estimate or present things in the best possible light because you’re second what you think a lender wants to see.
These days, it's almost impossible to conceal anything related to money, whether intentionally or innocently hidden. If you forget to add school fees to the mortgage calculator form or boost your commission slightly, we inevitably see every discrepancy discovered in the underwriting process. The lending decisions made from automated mortgage calculators are only as good as the data entered. The consequences of not being precise enough with your financials have the potential to bring your dreams back down to earth with a nasty bump. Your mortgage offer can fall short, you could find you can't afford what you thought you could, or you waste essential time in finding another deal.
Mortgage calculators don't fully reflect your choices at the top end of the mortgage market
We think it would be wrong for all of these reasons and based on our sector of the market, to create a generic mortgage calculator for you. You may have an unusual but very workable personal situation. You may be looking for something specific from a lender, or you might simply want someone with industry experience to give you honest, straightforward advice and answer all your questions. No mortgage calculator will be able to meet these needs.
Lastly, and perhaps most importantly, there are endless possibilities to secure a mortgage, even at the top end of the market. We truly believe a mortgage calculator would lead you to consider your options are more limited or rigid than is really the case.
You can give a member of our team a call at any time to discuss your situation further. You can also book a discovery call to have an informal chat about your needs. We are likely to be able to provide valuable insights and answers to your questions even from an initial discussion.
