Credit Score
A credit score is a three-digit number (typically 300–850) that summarises your credit history. Higher scores mean lower borrowing costs — a higher score on a mortgage can save tens of thousands of dollars over the loan's life.
FICO scores (the most widely used in the US) weigh: payment history (35%), amounts owed / credit utilisation (30%), length of credit history (15%), new credit (10%), and credit mix (10%).
The impact on borrowing costs is substantial. A 760+ score on a $400,000 30-year mortgage might get a rate 0.5%–1% lower than a 650 score — saving $130–$260/month, or up to $93,000 over the life of the loan.
In the UK, each lender uses proprietary scoring. In Canada, Equifax and TransUnion score from 300–900. In Australia, Equifax and Experian use similar ranges.
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Open calculator →Related terms
- Loan-to-Value Ratio (LTV)
- The loan-to-value (LTV) ratio is the mortgage amount divided by the property's appraised value, expressed as a percentage. An LTV above 80% typically requires private mortgage insurance (PMI) in the US.
- Debt-to-Income Ratio (DTI)
- The debt-to-income (DTI) ratio is your monthly debt payments divided by your gross monthly income, expressed as a percentage. Most lenders require a DTI below 43% to qualify for a mortgage.
- Mortgage Payment
- A mortgage payment is the fixed monthly amount owed to a lender, covering principal and interest (P&I). It may also include escrow for property tax and homeowners insurance (PITI).