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.
Did you know that the average mortgage in the UK is £200,000? This means getting a mortgage for £150,000 is very possible even on a slightly lower than average income.
If you are wondering “how much is a £150 000 mortgage a month UK?”, keep reading to learn more. In this guide, we delve into further detail on affording a £150,000 mortgage, keep reading to learn more and then get in touch with our team for mortgage advice tailored to your situation.
Understanding the mortgage repayments on 150k
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
How much is a £150 000 mortgage a month UK?
Our advisors give the following example: If the mortgage repayments on a £150,000 mortgage with a 3.5% mortgage rate and a 30-year loan term will be £673.57 per month.
Over the same term but with a higher mortgage rate of 5%, the repayments will be £805.23 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. 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.
£150000 Mortgage Calculator
To find out how much you might have to pay on a mortgage, use the mortgage repayment calculator below for estimated repayment figures.
Example monthly repayments
The table and graph below illustrates 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 Term | 2% Interest Rate | 3% Interest Rate | 4% Interest Rate | 5% Interest Rate |
|---|---|---|---|---|
| 10 | £1,380 | £1,448 | £1,519 | £1,591 |
| 15 | £965 | £1,036 | £1,110 | £1,186 |
| 20 | £759 | £832 | £909 | £990 |
| 25 | £636 | £711 | £792 | £877 |
| 30 | £554 | £632 | £716 | £805 |
| 35 | £497 | £577 | £664 | £757 |
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 interest rate 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 |
|---|---|---|
| 30 years | £632 | £500 |
| 25 years | £711 | £500 |
| 20 years | £831 | £500 |
| 15 years | £1,036 | £500 |
| 10 years | £1,448 | £500 |
| 5 years | £2,695 | £500 |
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 interest 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 |
|---|---|---|---|
| 30 years | £632 | £77,621 | £227,621 |
| 25 years | £711 | £63,358 | £213,358 |
| 20 years | £832 | £49,627 | £199,627 |
| 15 years | £1,036 | £36,437 | £186,437 |
| 10 years | £1,448 | £23,796 | £173,796 |
| 5 years | £2,695 | £11,712 | £161,712 |
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?
Your credit history can significantly impact your repayments on a £150,000 mortgage. With a bad credit rating, your mortgage options may be limited, and you may be asked to pay a higher deposit. Additionally, the interest on your mortgage will likely be higher, resulting in larger monthly repayments. In some cases, your application for a mortgage may even be rejected.
To avoid such situations, it’s essential to improve your credit score before applying for a mortgage. This will make you eligible for mortgages with competitive interest rates and lower monthly repayments. Our team can offer advice on how to improve your credit score and help you find the best mortgage deals, even if you have bad credit. As a result, get in touch with us to receive the support and advice you need to get the best mortgage deal.
What else can affect repayments on a £150,00 mortgage?
Other factors affecting repayment costs include the following.
Age
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.
Income type
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 most 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 most lenders so you usually be offered better mortgage rates if you opt for one of these.
Buy-to-let properties
If you are considering buy-to-let mortgages for a rental property, your monthly repayments 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 (normally 25%) of the property value.
For more advice on buy-to-let mortgages, lenders’ buy-to-let mortgage criteria, and how to get a competitive deal, get in touch with our specialist team.
150K interest only mortgage
It is still possible to get an interest-only mortgage however most mortgage lenders. Most mortgage lenders will need you to have a low loan to value ltv and a high income before they will consider an interest-only mortgage. mortgage lenders see a capital repayment mortgage a lower risk and that is why the majority of mortgages they offer are capital repayment basis.
Interest only mortgages were popular in the 1990’s as the mortgage repayments were far lower than a capital and interest mortgage however lots of analyses blame the recession in the late 1990’s on this!
How much do I need to earn to get a mortgage of £150 000?
Mortgage affordability is calculated by lenders using income multiples, which is usually 4.5 times the borrower’s annual salary. This means for a £150,000 mortgage, you would need to earn around £33,333. However, some lenders may use lower or higher income multiples, which can affect the required salary.
For joint mortgages, the lender will use the combined income of both applicants to determine affordability. If both applicants earn the UK average salary of £27,756, their joint income would be £55,512, which could afford a mortgage of around £249,804 based on the average income multiple of 4.5x.
This means to qualify for a mortgage of £150,000, the joint income would need to be at least £33,333 which is slightly lower than the national average.
Other costs that can affect your mortgage
To prepare for a £150,000 mortgage, you need to consider more than just the monthly repayments. Mortgage lender fees such as arrangement, valuation, and account fees, among others, should also be taken into account. Additional costs like building insurance and removal expenses should be factored in as well.
It’s important to consider all these expenses along with your monthly outgoings and annual income to avoid financial difficulties in the future. To ensure you get the right mortgage deals, speak to our team for specialist financial advice. As a FEE-FREE mortgage broker, we won’t charge you broker fees, saving you money on both interest rates and fees.
How a mortgage broker like YesCanDo Money can help you achieve a £150,000 mortgage
If you’re wanting to buy a property with a £150,000 mortgage or even a £170000 mortgage, get in touch with one of our experience online mortgage advisors 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.
