If you’re looking to buy a property that requires a £150,000 mortgage, you will likely want to know what your monthly repayments will be.
The answer isn’t always straightforward as there are a number of factors that can influence monthly costs.
These factors include:
- Interest rates
- The length of the mortgage term
Our advisors give the following example: If the mortgage repayments on a £150,000 mortgage with a 2.5% mortgage rate and a 30-year loan term will be £672.93 per month.
Over the same term but with a higher mortgage rate of 5%, the repayments will be £876.89 per month.
However, the type of mortgage can also determine what your monthly repayments will be, and we have observed that there can be other factors that can impact repayment costs.
We will go into further detail in this guide so keep reading to learn more and then get in touch with our team for mortgage advice tailored to your situation.
How much is a 150 000 mortgage a month UK?
As we suggested, the amount you pay monthly will depend on a number of factors, including the interest rate and the mortgage term.
Other factors that can affect your monthly mortgage repayment include:
- The mortgage type
- The size of your deposit
- Your credit rating
- The type of property you are considering
It’s important to keep in mind that each lender is different and they all have their own lending criteria. It’s been our observation that this can also have a big impact on your mortgage monthly repayments so it’s wise to seek the services of a mortgage broker, such as ourselves if you want to find a lender that offers you the cheapest mortgage.
Example monthly repayments
The table below shows how the interest rate and loan term can affect your repayments on a £150,000 mortgage. These are example calculations as your actual repayments will also depend on the loan type and your personal circumstances.
|Loan Tearm (in years)||2%||3%||4%||5%|
The table above is based of a mortgage amount of £150,000. The repayments have been rounded to the nearest £.
To find out how much you might have to pay on a mortgage, use the mortgage repayment calculator below for estimated repayment figures.
How do interest rates affect mortgage repayments on a £150,000 mortgage?
Most lenders offer interest rates between 1% to 5% on a mortgage. You pay the interest in addition to the capital on your loan. The higher the interest rate the higher your monthly payments will be.
You can see how interest rates affect mortgage repayments by looking at the table we highlighted earlier.
How much you pay each month will depend on the type of mortgage you choose.
- If you choose a capital repayment mortgage, your monthly payments will consist of a portion of the loan capital and the interest.
- If you choose an interest-only mortgage, your monthly payments will only include the interest. This can reduce the size of your payments but the rate of interest is higher and you will still need to pay the capital at the end of your loan term.
Check out the table below for an idea of how the different loan types can affect monthly repayments on a £150K mortgage with an interest rate of 3%.
|Repayment Period||Monthly payment on capital repayment mortgage||Monthly repayment on interest-only mortgage|
The table above is based on a £150,000 mortgage with an interest rate of 3%.
Please note: If you move onto your lender’s standard variable rate at the end of your initial rate period, your repayments will increase as their standard rate is typically higher than a competitive fixed rate of interest,
What interest rate will I be offered?
The rate you are offered will depend on:
- The size of your deposit
- Your credit score
- The type of mortgage you choose
- The size and duration of your loan
You can reduce the size of your interest repayments by…
- Saving up for a larger deposit
- Taking steps to improve your credit score
- Choosing a shorter loan term
- Shopping around different mortgage lenders
- Using the services of a mortgage broker
How does the mortgage term affect monthly payments on a £150,000 mortgage?
Mortgages are usually 25 years in length but you can take out a mortgage on a shorter or a longer term if you prefer.
It’s often advisable to take out a mortgage over a longer period as your monthly repayments will be lower. However, you will pay more in the long run as you will be paying interest over an extended period of time.
Shorter-term mortgages come with lower interest rates but your overall repayments will be higher because you’re paying off the capital in a shorter amount of time.
When deciding on a mortgage term, we would advise that you consider how much you can feasibly afford to pay each month. A shorter term can seem attractive as you will pay off your mortgage sooner, but the tradeoff is higher monthly payments.
To ensure you make the right decision, speak to one of our expert mortgage advisors at YesCanDo Money for advice related to your personal situation.
In the meantime, check out the table below. This gives you an idea of how the length of the term affects monthly and total payments on a £150 000 mortgage with 3%.
|Term||Monthly Repayment||Interest||Total Repaid|
The table above is based on a £150,000 mortgage with an interest rate of 3%. We have rounded the amounts to the nearest £.
How does the mortgage deposit affect repayments on a £150,000 mortgage?
A deposit is usually between 5-25% of the total loan amount.
The deposit will affect the loan to value (LTV) ratio of the mortgage you are offered. With a higher deposit, the LTV will be reduced and this can give you access to better rates and terms. Consequently, your repayments will be lower than they would be on a higher LTV mortgage with a smaller deposit.
For the best deals on a £150,000 mortgage, with a favourable interest rate and smaller repayments, you should aim for as large a deposit as you can afford.
How does credit history affect repayments on a £150,000 mortgage?
With very few mortgage providers lending to applicants with a bad credit rating, you should do all you can to improve your credit rating if it is particularly low.
With a good credit score, you will become eligible for mortgages with competitive interest rates and lower monthly payments.
With a bad credit score, you may be asked to pay a higher deposit. The interest on your mortgage will likely be higher and this will equate to larger monthly payments. There is also the chance that your application for a mortgage will be rejected if your credit history is particularly severe.
Can my application be rejected if I have a bad credit rating?
If you do have a bad credit rating, your mortgage chances will depend on lender criteria. Some mortgage providers will reject your application while others will accept you for a mortgage, but with the possibility of higher mortgage rates.
Our advice? Do what you can to improve your credit score before you apply for a mortgage. The better it is, the less you will pay monthly as you should become eligible for better loan deals.
To get the best deal on a mortgage with or without bad credit, get in touch with our team and we will advise you further.
What else can affect repayments on a £150,00 mortgage?
Other factors affecting repayment costs include the following.
Most lenders impose a maximum age limit on their mortgages. This is the age you need to be when you have finished paying off your mortgage. The max age limit for a mortgage is usually between 75-85 but it will depend on the lender’s criteria.
Your age can impact the loan term you are offered as the older you are, the shorter the term will typically be. This can have an impact on how much you pay each month as shorter mortgages equate to higher repayments.
When assessing your affordability, your lender will consider the amount of money you earn each month and your income type.
Generally speaking, the more you earn, the more money the lender will be willing to offer you. This can sometimes equate to better deals although the size of your deposit, credit rating, and income type will still factor into their decision.
In terms of income type, the rates you are offered will depend on whether you’re self-employed or a PAYE employee. Quite often, mortgage lenders offer better rates to PAYE earners as their income is usually more stable. Therefore, they can sometimes benefit from lower repayments on their mortgage.
If you are self-employed and looking for a mortgage, you won’t necessarily be ruled out of the best rates, however. Some lenders specialise in self-employed mortgages and these are more likely to offer you better rates of interest than lenders on the high street.
Type of property
Not only can the property value of a house affect your mortgage but the type of property you choose can also determine the mortgage rates you will be offered.
This is because some property types are considered riskier than others, such as those that are built with non-standard construction materials, such as timber or steel. Mortgage rates are often higher on these types of properties so your repayments will be higher.
Bricks and mortar properties are seen as ‘standard’ by lenders so you usually be offered better mortgage rates if you opt for one of these.
If you are considering buy-to-let mortgages for a rental property, your monthly payments may be lower. This is because many buy-to-let mortgages are interest-only. However, you will still need to repay the capital at the end of your loan term but you could do this by selling your property if this was a good option for you.
Due to the risk factor involved when lending to rental property owners, your lender might also ask you to pay a high deposit (up to 40%) of the property value.
Other costs that can affect your mortgage
When applying for a £150,000 mortgage, you need to budget for more than just the monthly repayments on your mortgage amount.
You also have to budget for the other costs attributed to your mortgage. These will include the mortgage lender fees that they will charge you, including arrangement fees, valuation fees, mortgage account fees, and a range of other fees that will affect the overall cost of your mortgage.
Going beyond your mortgage, you should also factor in other expenses that you will have to consider, such as removal costs and building insurance.
You should take all of those costs into account when considering your various monthly outgoings in context of your approximate annual income to make sure you don’t get into any financial difficulties later.
Before applying for a mortgage, work out what you can afford to pay monthly and then speak to a member of our team. We will offer you specialist finance advice when you use our services and will direct you to the mortgage deals that are right for you.
Please note: Should you use our services, you won’t be charged broker fees. This is because we are a FEE-FREE mortgage broker. So, while some mortgage brokers will charge you a fee for their services, we won’t!
As such, you will save money if you choose us for your mortgage. Not only will you save money when we find you a mortgage with more competitive interest rates but you will also make savings by having one less fee to worry about.
How YesCanDo Money Can Help
If you’re wanting to buy a property with a £150k mortgage, get in touch with an online mortgage advisor at YesCanDo Money today.
With over 40 years of experience, we can provide mortgage advice that is based on your personal and financial circumstances and can help you get the mortgage deal that is right for you.
We will also help you with each and every aspect of your mortgage application to improve your chances of getting a mortgage approved by an appropriate lender.
As all of our advisors are knowledgeable about a range of different mortgage subjects, we can also any questions you may have about mortgages and your mortgage chances.