Boat Finance Calculator

Buying a boat is often a long-held ambition, and for many people finance is what makes it possible. But borrowing for a boat works a little differently from borrowing for a car, and the true cost goes well beyond the monthly payment. This guide explains the main types of boat finance available in the UK, what lenders look for, and how to work out what a boat will really cost you over the years you own it.

If you already have a price and a quote in mind, our boat finance calculator will show your monthly payment, the total interest and how the balance falls year by year.

The main types of boat finance

There are three common ways to finance a boat in the UK. Each suits a different budget and type of boat.

Marine mortgages

A marine mortgage is a loan secured against the boat itself, much like a house mortgage is secured against a property. Because the lender can repossess the vessel if you stop paying, rates are usually lower than unsecured borrowing and terms can be longer, often up to 15 or even 20 years for newer, more valuable boats.

Lenders normally want the boat to be registered, and many insist on Part 1 of the UK Ship Register because it records the mortgage against the vessel. Older boats usually need a recent survey before a lender will agree.

Boat loans and hire purchase

For smaller or older boats, many buyers use a specialist marine loan or a hire purchase agreement. With hire purchase you pay a deposit, then fixed monthly payments, and you own the boat once the final payment and any small option-to-purchase fee are made. Terms are typically shorter, from one to ten years.

Unsecured personal loans

A personal loan isn't tied to the boat at all. That makes it simple: you can buy privately and own the boat outright from day one. The trade-off is that personal loans are usually capped at around £25,000 to £50,000, and rates depend heavily on your credit score.

What lenders look for

Whichever route you choose, lenders want to know that the payments are affordable and that the boat holds its value. Expect them to check:

• Your deposit. Most lenders ask for 10% to 20% of the price. A larger deposit usually unlocks a lower rate.
• Your income and outgoings. Consumer boat finance is regulated by the Financial Conduct Authority, so lenders must check affordability properly.
• Your credit history. Missed payments or high card balances can push the rate up or lead to a decline.
• The boat's age and condition. Many lenders won't finance boats over a certain age, or will shorten the term for older vessels.
• Insurance. You'll almost always need comprehensive marine insurance in place for the life of the loan.

How much does boat finance cost?

The cost of borrowing comes down to three things: how much you borrow, the interest rate, and how long you take to repay. The longer the term, the lower the monthly payment, but the more interest you pay overall.

Take a £45,000 boat with a £9,000 deposit, leaving £36,000 to borrow at 8.9% APR. Here's how the term changes the picture:

Stretching the loan from five to fifteen years cuts the monthly payment by more than half, but more than triples the interest. You can try your own figures in the boat finance calculator.

APR, flat rates and fees

Always compare quotes using the APR (annual percentage rate). The APR includes interest and most compulsory fees, so it gives a fair like-for-like comparison. Some dealers quote a "flat rate", which looks much lower but is calculated on the original amount borrowed for the whole term, even as you pay it off. A flat rate of 5% is roughly equivalent to an APR of around 9% to 10%.

Ask about arrangement fees, early repayment charges, and whether you can overpay without penalty. Being able to clear the loan early, for example after a bonus, can save a lot of interest.

The running costs to budget for

The finance payment is only part of the cost of owning a boat. A common estimate is that running costs add up to around 10% of the boat's value every year, though this varies widely. Typical costs include:

• Mooring or marina fees. Often the biggest cost after the loan itself, and highly dependent on location.
• Insurance. Usually required by the lender, and priced on the boat's value, use and your experience.
• Servicing and maintenance. Engine servicing, antifouling, winterisation and lifting out.
• Licences. Inland waterways such as those managed by the Canal & River Trust require a licence.
• Fuel, safety equipment and training.

Add these to your monthly finance payment before deciding what you can afford. A boat that costs £450 a month to finance might cost £800 or more a month to own.

New or used?

New boats come with warranties and are easier to finance over long terms, but they lose value quickly in the first few years. Used boats are cheaper and depreciate more slowly, but you'll need a survey, and lenders may offer shorter terms. For a used boat, budget for the survey and any work it uncovers before you commit.

Steps to take before you apply

1. Set a total budget that includes running costs, not just the price.
2. Check your credit report and fix any errors.
3. Save the largest deposit you comfortably can.
4. Get quotes from a specialist marine lender, your bank and, if buying from a dealer, the dealer's own finance.
5. Compare APRs and total amounts repayable, not just monthly payments.
6. Arrange insurance and a survey before the finance completes.