Every calculation the CeMAP exams test

LTV = loan ÷ property value × 100

Divide the loan by the property's value (use the lower of price and valuation) and express it as a percentage. LTV bands drive pricing, so exam questions often ask which band a case falls into.

Worked example: £252,000 loan on a £315,000 house: 252,000 ÷ 315,000 = 0.80 → 80% LTV.

Maximum loan = combined gross income × multiple

Multiply the total gross income by the lender's multiple. Watch for questions that mix single and joint multiples, or that include non-guaranteed income the lender would discount.

Worked example: £32,000 + £26,000 at 4.5×: 58,000 × 4.5 = £261,000 maximum loan.

Deposit % = deposit ÷ price × 100 (and LTV = 100 − deposit %)

The deposit and the LTV always sum to 100% of the price. Questions often give the deposit and ask for LTV, or give the required LTV and ask for the cash needed.

Worked example: £24,000 deposit on £240,000 = 10% deposit → 90% LTV. For 75% LTV the deposit must be £60,000.

Tax = sum of (slice of price in each band × that band's rate)

SDLT is banded like income tax: each rate applies only to the slice of the price inside its band, never to the whole price. First-time buyer relief moves the nil-rate threshold up but is lost entirely above the relief ceiling. Additional properties add a surcharge on the whole price on top of the standard bands.

Worked example: First-time buyer at £310,000 with relief to £300,000: 0% on the first £300,000, then 5% × £10,000 = £500.

Required rent = loan × stress rate × cover ÷ 12

Multiply the loan by the stressed interest rate for the annual interest, apply the coverage percentage (typically 125%, or 145% for higher-rate taxpayers), then divide by 12 for the monthly rent the lender needs.

Worked example: £180,000 at a 5.5% stress rate, 125% cover: 180,000 × 0.055 = £9,900 × 1.25 = £12,375 ÷ 12 ≈ £1,031 a month.

ERC = balance repaid × ERC percentage

Apply the ERC percentage to the amount being repaid. Watch for stepped ERCs (the percentage depends on which year of the deal you're in) and overpayment allowances (only the excess above the allowance is charged).

Worked example: Repaying £192,000 with a 2% ERC costs £3,840. With a 10% annual allowance, repaying £30,000 of a £200,000 loan charges the ERC only on £10,000.

Annual saving = offset savings × mortgage rate

Savings in the linked account stop that slice of the loan accruing interest, so the saving equals the savings balance times the mortgage rate — effectively a tax-free return at the mortgage rate.

Worked example: £20,000 offset against a loan at 5%: 20,000 × 0.05 = £1,000 interest saved a year.

Gross equivalent = mortgage rate ÷ (1 − tax rate)

To beat offsetting, a taxed savings account must pay the mortgage rate grossed up for the saver's tax band. Divide the mortgage rate by (1 minus the tax rate as a decimal).

Worked example: 5% mortgage, 40% taxpayer: 0.05 ÷ 0.6 ≈ 8.3% — the gross rate ordinary savings would need to match.

Years to double ≈ 72 ÷ interest rate

Divide 72 by the annual rate to estimate how long compound interest takes to double a debt — the key illustration for lifetime-mortgage roll-up.

Worked example: £80,000 at 7.2% doubles to about £160,000 in roughly 72 ÷ 7.2 = 10 years.

Monthly payment = loan × annual rate ÷ 12

Multiply the loan by the annual rate and divide by 12. There is no capital element, so the sum is exact — and it works in reverse to find the loan from a payment.

Worked example: £150,000 at 4.8%: 150,000 × 0.048 = £7,200 ÷ 12 = £600 a month.

Claim paid = loss × (sum insured ÷ full reinstatement cost)

If a property is insured for less than its full rebuild cost, claims are scaled down proportionately. Multiply the loss by the ratio of cover held to cover needed.

Worked example: Insured for £150,000 against a true rebuild cost of £200,000 (75%): a £40,000 claim pays 40,000 × 0.75 = £30,000.

Total cost over the deal = (monthly payment × months) + fees

Work out the full cost of each option over the deal period — payments plus arrangement fees — rather than comparing rates alone. Fees are fixed, so they hurt small loans proportionately more.

Worked example: On a small loan a £999 fee can outweigh a 0.2% rate saving; on a £500,000 loan the lower rate wins comfortably. Always total both columns.