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What are The Mortgage Repayments on a £300,000 Mortgage?

As a mortgage is one of the biggest commitments you’ll make in your financial life, it’s important to calculate and fully understand your monthly payments before you make your application. You can do this using the different mortgage lenders’ mortgage calculators or by asking an experienced mortgage broker to do the sums on your behalf.

In this guide, we will give you an idea of what your monthly repayments might be on a £300,000 mortgage.

If you would like to speak to a member of our team about a £300,000 mortgage after reading this guide, get in touch with us using the contact details on our website and we will arrange a meeting with you.

What is the monthly payment on a 300k mortgage UK?

The exact size of your monthly repayments will depend on a number of factors. These include:

  • the interest rate you are offered by the mortgage lender
  • the size of your mortgage
  • the term of your mortgage
  • the repayment type of your loan

To give you an example of what your monthly repayments might be on a £300,000 mortgage with an interest rate of 5% and a 25-year term will cost you around £1,754 a month. This is an estimate as the exact figure will depend on the various factors that we will mention in this guide.

To get an idea of what your monthly repayments might be, based on the term of your mortgage and interest rate, use the mortgage repayment calculator below and then speak to an exclusive mortgage expert at YesCanDo Money for a more accurate figure.

years
Monthly Repayment: Total Interest Paid:
Please note: This calculation is a guide to how much your monthly repayments would be. The exact amount may vary from this amount depending on your lender's terms.
Let us calculate it for you, it wont cost you anything

How to get a 300k mortgage

The best way to get a 300k mortgage deal is to speak to a professional mortgage broker, such as ourselves. As we have access to both mainstream lenders and mortgage lenders that can’t be found on the high street, we are able to find our customers the best mortgage deal at the lowest mortgage rates.

The deal you are offered will depend on a number of factors, including your age, credit history, and deposit size. But no matter your personal circumstances, we will make sure you get a deal that is right for you.

How much do you need to earn to qualify for a £300,000 mortgage?

Lenders will usually offer you a mortgage that is between 4 – 6 times your yearly income.

To qualify for a £300,000 mortgage, you will need to be earning…

  • £75,000 if the lender agrees to offer you a loan 4 x your annual income
  • £60,000 if the lender agrees to offer you a loan 5 x your annual income, or
  • £50,000 if the lender agrees to offer you a loan 6 x your annual income

If you’re applying for a joint mortgage, you don’t need to earn as much. However, the combined income of you and your partner would need to match the figures above.

How much deposit do you need for a £300,000 mortgage?

For a £300,000 mortgage, you will need a deposit of at least £15,000.

The actual size of your deposit will depend on the value of the house you are buying, the maximum loan-to-value (LTV) that the lender offers, and the level of risk you pose to the lender.

Find out how much your mortgage payments will be

Deposit size based on loan-to-value

Most lenders set the maximum loan-to-value ratio at 90%, meaning you will need a deposit size of 10% of the property value.

If you can’t afford a 10% deposit, you may be able to get a 95% loan-to-value mortgage if you meet the lending criteria. If you are eligible for one of these, your deposit will need to be 5% of the property’s value.

However, it’s worth saving up for a bigger deposit if you can, such as 15% for an 85% loan-to-value mortgage as you will be eligible for better deals with more favourable rates of interest.

The table below shows how much you would need for a £300k mortgage at different loan to values.

Property value Loan-to-value Loan size Deposit required
£300,000 95% £285,000 £15,000
£300,000 90% £270,000 £30,000
£300,000 85% £255,000 £45,000
£300,000 75% £225,000 £75,000

How does interest rate affect repayments on a £300k mortgage?

The higher the interest rate, the higher your monthly repayments will be.

Due to a turbulent market due to the cost of living crisis, interest rates have been continuing to rise. At the time of writing, interest rates are between 5% and 6% so your monthly repayments could be anywhere from £1,754 to £1,932.90 a month.

The interest rate on your mortgage will depend on…

  • the size of your deposit
  • your credit history
  • the mortgage type
  • the term of the mortgage

To benefit from the rates of interest, you should:

  • increase the size of your deposit
  • take steps to improve your credit score
  • shorten the term of your mortgage
  • speak to a mortgage broker

Is the interest rate lower on a fixed or variable mortgage?

Variable-rate mortgages often have a lower starting rate than fixed-rate mortgages but as the interest rate on variable mortgages can rise over time, most people prefer to find a good fixed-rate deal where the interest rate doesn’t change for the fixed term period.

How does the mortgage term affect £300k mortgage repayments?

Most borrowers take out a mortgage over a 25-year term but you can take out a loan over a shorter or longer term if you prefer, provided the lender agrees and you can afford to make your monthly mortgage repayments.

First-time buyers will often opt for a longer term of 30 or even 35 years.

The minimum term of the mortgage for a residential mortgage is usually 5 years but it may be possible to find a lender that agrees to a shorter length of time. The maximum term of the mortgage set by lenders is usually 40 years.

If you choose a shorter term for your mortgage, your monthly repayments will be higher because you will be paying off your mortgage in a shorter length of time. A benefit to having a shorter term is you will pay far less in interest over the whole term of the mortgage.

If you choose a longer term for your mortgage, your monthly repayments will be lower but as you will pay more interest on a long-term mortgage, the overall cost of your loan will be higher than that on a short-term mortgage.

How long should you set your mortgage term for?

If you can afford to take out a shorter term for your mortgage, you will pay off your loan faster. But if you want to reduce your monthly repayments, perhaps because finances are tight, you will be better off opting for a longer term for your mortgage.

To find out how much the mortgage monthly repayments on a £300,000 mortgage might be based on a 5.5% interest rate at different mortgage terms, check out the table below.

Calculations on a £300k mortgage

Loan amount Mortgage rate Mortgage term Monthly payments Total to repay
£300,000 5.5% 25 years £1,842.26 £552,678
£300,000 5.5% 30 years £1,703.37 £613,213
£300,000 5.5% 35 years £1,611.05 £676,641
£300,000 5.5% 40 years £1,547.31 £742,709

This table has been created for guidance purposes only and assumes the interest rate will stay the same for the full length of the mortgage term. Interest rates will change if you remortgage to a new deal or fall onto your lender’s standard variable rate.

There are other rate/term combinations so use our mortgage repayment calculator to estimate what your payment costs might be or speak to one of our fee-free mortgage advisors.

Find out how much your mortgage payments will be

How The Repayment Type Affects Monthly Repayments

When taking out a mortgage, you can choose a repayment mortgage or an interest-only mortgage.

Should you choose a repayment mortgage, your monthly repayments will be made up of a portion of the mortgage capital and the interest charge.

If you choose an interest-only mortgage, your payments will only consist of the interest each month. At the end of the mortgage, you will need to repay the rest of the loan.

Which repayment type is best for you?

Interest-only mortgages

If you want to keep costs down, an interest-only mortgage might be better for you as your monthly repayments will be smaller. However, the mortgage lender will want evidence of a repayment strategy as they will expect you to pay off the mortgage capital at the end of your mortgage. The lender will also expect a bigger deposit which will usually be 25-30% of the property value. It’s worth noting that most lenders will require you to have an above-average income to consider an interest-only mortgage.

Repayment mortgages

Your monthly repayments will be higher if you take out a repayment mortgage but at the end of your loan term, you will have nothing left to pay on the mortgage. This is the preferred choice for many people as they don’t have to worry about raising funds to pay one final lump sum.

Which repayment type is best for you? Well, this depends on your financial position now and what it might be like in the future.

While interest-only mortgages seem attractive due to the lower monthly payments, you take one out at your own risk as you will need to make a concerted effort to save up for the final payment.

Repayment mortgages are sometimes the better option for people wanting to clear all of their mortgage before the term ends although monthly payments are higher.

For a discussion of which repayment type might be best for you, get in touch with our experienced team and we will give you mortgage advice based on your personal situation.

Related Reading: The Different Types of Mortgages Explained

Other Factors That Can Affect Your Mortgage

There are other factors that can affect the repayments on your mortgage deal. These include the following.

Your Income Sources

Employees on a PAYE income will often find it easier to get a mortgage than the self-employed. This is because full-time employees often have a more stable income and a job contract so lenders consider them less of a borrowing risk.

This might seem unfair to you if you are self-employed but it’s been our observation that there are specialist lenders who will treat you more favourably than some mainstream lenders on the high street. We have plenty of experience and can put you in touch with these so get in touch with our team to learn more.

Your debt-to-income ratio

When calculating your affordability for a mortgage, your mortgage lender will work out your debt-to-income ratio. This is a measure of how much your monthly income goes towards paying off your various debts, such as your credit cards, finance loans, and other debts.

The less debt you owe the better as this will lower your debt-to-income ratio. For you, this means a higher deposable income and possibly access to better deals with more competitive rates of interest.

If you do have a lot of debt, your debt-to-income ratio will be higher. In such a situation, you may be subjected to specialist mortgage lenders and possibly higher rates of interest and, in a worst-case scenario, your mortgage application could be denied.

Your age

Most lenders have a maximum lending age of 70 (the age you need to be when your term ends) although some lenders will raise that cap to 75 and above.

You will likely be charged a higher interest rate if you’re an older borrower because you may be asked to take out a mortgage at a shorter term if you’re over 50 or close to retirement age.

Younger borrowers (under 50) benefit from lower monthly mortgage payments because they are more likely to be eligible for longer mortgage terms.

For a detailed consideration of how age can affect your mortgage payments, check out our guide on the maximum age for a mortgage.

Bad credit

If you have a good credit score, not only are you more likely to get your mortgage approved but you stand a better chance of being offered more competitive rates of interest from most lenders.

If you have a bad credit score, your application may be denied if you approach a mainstream lender.

Thankfully, some specialist lenders are more flexible but if you have had recent credit issues, you may be ruled out of the most competitive deals.

With very few mortgage providers lending to customers with a bad credit score, you should make an effort to improve your credit rating if it is particularly low. By doing so, you will have a wider choice of lenders and access to more affordable mortgage deals.

Find out how much your mortgage payments will be

Other costs that can affect your mortgage

There are other costs that affect the total cost of your mortgage, such as the booking fee (also known as the arrangement fee), valuation fee, and mortgage account fee. You can pay these fees upfront or add some of them to your mortgage. If you do add them to the loan, you will need to pay interest on them. As such, your monthly costs will then be higher.

How YesCanDo can help you achieve a £300k mortgage

If you’re looking to buy a house requiring a £300k mortgage, our mortgage brokers are here to help you find the most affordable deal.

All the advisors at YesCanDo Money have the experience to provide mortgage advice but our broker matching service will match you with the online mortgage advisor that is the right fit for your particular situation.

Should you be looking for a £300k mortgage specifically, your appointed online mortgage advisor will consider your income, monthly outgoings, employment status, and the other factors we have discussed in this article, and will let you know of your eligibility.

If you are eligible for a £300k mortgage, your online mortgage advisor will give you advice on what you can do to gain access to the cheapest deals on the market. They will then search the mortgage market on your behalf to find the most affordable loan for somebody in your situation.

With the help of a mortgage calculator that has access to over 14,000 different rates and deals our mortgage advisors will find the very lowest rate that is available to you and won’t charge you a penny as we are a fee-free mortgage broker

If you would like to know more, get in touch with us about your mortgage online using the contact form below and we will arrange our first consultation with you.

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Steve Roberts
Steve Roberts

Stephen Roberts MAQ is the founder of YesCanDo Money, one of the UK's largest no-fee mortgage brokers. With over 30 years of mortgage experience, he has advised and helped thousands of first-time buyers buy their first home and home movers buy their dream home. Speak to a mortgage expert today by completing our contact form:

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