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£170,000 Mortgage Approval: Repayments & Lender Guide

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    If you’re looking to buy a property worth £170,000, you will be keen to know if lenders would be willing to lend you enough money for a mortgage. Given the UK’s average mortgage is £200,000, securing a £170,000 mortgage could be feasible on a modest income.

    This guide will detail the evaluation criteria used by lenders for mortgage applications. If you would like to learn more after reading this piece, don’t hesitate to get in touch with our expert team of mortgage brokers who will be happy to advise you further.

    Eligibility for a £170,000 Mortgage

    Your financial situation is the primary factor determining your mortgage eligibility. If you are able to make the payments on a mortgage for £170,000 (and cover the associated fees) most lenders will be willing to accept your application.

    Other factors also influence your mortgage eligibility and monthly expenses, meriting careful consideration.

    Mortgage lenders criteria

    How heavily each mentioned factor will impact your mortgage application depends on the individual mortgage lender. Some lenders have very strict criteria while others are more flexible.

    Should you choose to use our services, we will advise you on the mortgage lenders that best fit your situation after learning more about your financial circumstances.

    What affects my eligibility for a £170,000 mortgage?

    Lenders will often consider the following when determining an applicant’s eligibility for a mortgage.

    • Your employment, including how long you’ve worked 
    • Your income vs outgoings
    • Your credit history
    • Your age
    • The type of property you want to buy

    Lender criteria can differ so while one lender might reject your application if you have a bad credit history, for example, other lenders may be willing to let you borrow money for a mortgage if your credit issues are now in the past. As mortgage experts, we can compare lenders on your behalf, so after considering the above eligibility factors, we will find a lender offering the best mortgage deals to somebody in your situation.

    How much do I need to earn for a £170,000 UK mortgage?

    To ensure you can repay your mortgage, lenders will assess if your income is sufficient. As such, they will make their mortgage calculations based on your earnings to make sure you are suitable for a £170,000 loan.

    Income multiples

    UK lenders commonly apply income mortgage multiples to assess loan affordability. The majority of lenders use an income multiple of 4.5, so if you were applying for a mortgage worth £170,000, you would need to be earning a minimum of £37,777 a year.

    In some circumstances, some lenders will use higher-income multiples and we can point you in the direction of these if we think you meet their criteria.

    Mortgage repayments

    Use the mortgage repayment calculator below to estimate £170k mortgage repayments and compare them with your monthly income. It might be that you’re in a position to borrow more for a more expensive property or you might need to choose a cheaper place to live if you don’t think you’re in a position to repay a £170k mortgage.

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    How do I provide evidence of my income for a £170k mortgage?

    All mortgage applicants must provide bank statements covering the last 3 months or more. Lenders use these to cross-reference your proof of income and declared earnings with your named bank account.

    The other evidence you will need to provide will depend on whether you’re employed or self-employed.

    Learn how to provide Proof of Income for your Mortgage

    Proof of income for employed applicants

    If you are working for an employer, a mortgage lender will typically ask for the following.

    • 3 months payslips and 2-3 years’ P60s
    • Evidence of any bonuses, overtime, and commission you have received (if this isn’t detailed on your payslips)
    • An employment contract if you have recently started (or are due to start) a new job

    Proof of income for self-employed applicants

    It’s possible to get a mortgage if you’re a freelancer or a contractor but lenders will want to make sure that your income is both regular and substantial enough to cover a mortgage during the repayment term.

    To assess your eligibility, the lender will ask for the following.

    • 1 -3 years of certified accounts
    • Your SA302 year-end tax calculations for the previous 2-3 years (along with your tax year overview)
    • Signed copies of upcoming contracts (if you’re a contractor)
    • An accountant’s certificate (not all lenders ask for this)

    What would the monthly repayment be on a £170000 mortgage?

    The mortgage repayments on a £170,000 mortgage will be £994.26 a month based on a mortgage rate of 5% on a 25-year term.

    A number of factors will affect how much your monthly repayment might be on your mortgage. These factors include:

    • The length of the mortgage term: the longer the term, the lower your monthly repayment will be
    • The mortgage interest rate: higher interest rates equate to higher mortgage repayments
    • The mortgage type: such as a fixed-rate mortgage, tracker mortgage, or interest-only mortgage
    • How much deposit you are able to put down: a bigger deposit often equates to lower mortgage interest rates
    • Your credit score: if you have a good credit score, you will be eligible for more affordable mortgage deals with lower rates of interest and a smaller monthly repayment

    We will take all of these factors into account when we calculate the costs of your potential mortgage and then find ways to lower your monthly repayments to help you save money.

    But if you would like an example of what your monthly repayments might be, the table below illustrates the monthly mortgage repayments on £170,000 mortgages over different mortgage terms with an annual interest rate of 5%.

    < Swipe left on mobiles to see hidden columns
    Repayment Term (Years)
    Amount Type 5 Years 10 Years 15 Years 20 Years 25 Years 30 Years
    Monthly Mortgage Repayments £3,208 £1,803 £1,344 £1,122 £994 £913
    Amount Borrowed £170,000 £170,000 £170,000 £170,000 £170,000 £170,000
    Amount Repayable £192,487 £216,374 £241,983 £269,262 £298,141 £328,535
    Total interest paid £22,487 £46,374 £71,983 £99,262 £128,141 £158,535
    Actual interest rate (Repaid vs Borrowed) 13.23% 27.28% 42.34% 58.39% 75.38% 93.25%

    The mortgage repayment examples below are based on an annual interest rate of 5% over a 5-year to 30-year term.

    You can calculate the estimated monthly costs of different mortgages using the mortgage calculator below.

    For a more accurate figure, get in touch with our mortgage team who will use their calculators to work out your mortgage payments based on your exact set of circumstances.

    Mortgage repayment calculator

    Compare payments on a £170k mortgage based on loan term, mortgage type, and interest rate by using the mortgage repayment calculator below.

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    How a mortgage broker can help to get lower monthly repayments

    Our fee free mortgage broker mortgage houses a team of experts who can assess your financial situation and eligibility for a £170, 000 mortgage and compare deals on your behalf before you apply to a lender. This way, you will be able to save time by not applying to lenders that may not be suited to you. You won’t risk damaging your credit score through rejected mortgage applications either!

    We will tailor your mortgage to your specific mortgage needs. If you intend to repay your mortgage early or think you may want to move home early we will make sure your mortgage is both portable and also flexible with the lowest fixed rate and interest charges.

    If we feel that you will get a better interest rate and at a lower cost by having a slightly bigger deposit we will give you the repayment structure for both so you can work out the overall cost and how much you want to borrow.

    We will advise you on the lenders that are suitable for your employment situation and we will help you prepare the documents you need for your application.

    How much deposit do I need to buy a £170,000 house?

    The size of your deposit will depend on the loan-to-value (LTV) of the mortgage you are applying for.

    Mortgages with a higher loan-to-value, such as a 90% LTV mortgage will require a smaller deposit, but whether or not you will be eligible for these will depend on a number of factors, including your credit score.

    If you are able to save for a larger deposit for a higher LTV mortgage, you will have access to a wider range of lenders and more affordable mortgage deals with lower interest payments. This is one way to reduce your monthly costs so is worth considering if you have the financial ability to make a higher payment upfront.

    Mortgage deals with smaller deposit sizes often come with a higher rate of interest. This means your mortgage repayments will also be higher. We appreciate this can make life difficult for some people but we can advise you on ways to raise funds for a deposit and reduce your loan size. If you’re a first-time buyer, our mortgage experts can also advise you on the government schemes that can help to make a mortgage more affordable.

    The table and graph below illustrate how much deposit you will need to pay for mortgages at different loan-to-values.

    < Swipe left on mobiles to see hidden columns
    Property value Deposit size as a percentage Deposit size in GBP Mortgage amount LTV ratio
    £170,000 5% £8,500 £161,500 95%
    £170,000 10% £17,000 £153,000 90%
    £170,000 15% £25,500 £144,500 85%
    £170,000 20% £34,000 £136,000 80%
    £170,000 25% £42,500 £127,500 75%

    YesCanDo Money Can Help

    If you’re looking to get a £170,000 mortgage or even a mortgage for £180000, the team at YesCanDo Money can help. We will:

    • Calculate your affordability for a mortgage
    • Give you advice on how to reduce the interest payments on your mortgage
    • Advise you on the mortgages that are right for your situation
    • Explain mortgage fees and lender criteria to you
    • Compare mortgage deals and lenders on your behalf
    • Support you with your mortgage application
    • Give you all the advice and support you need throughout the mortgage process

    To learn more about what our team can do for you, whether you’re looking to take out a new mortgage or extend an existing mortgage, give us a call at 033 0088 4407 or use WhatsApp or our contact form to get in touch with a member of our expert team.

    Mortgage advice for mortgage for £170 000

     

    FAQS

    It’s certainly possible to get a mortgage if you’re self-employed although it’s worth noting that fewer lenders offer mortgages to people with this employment type.

    Those that do offer mortgages to self-employed borrowers will often have strict requirements but this doesn’t mean you will be ruled out of competitive mortgage deals.

    To improve your chances of getting a £170k mortgage, you should:

    • Save money for a larger deposit

    • Improve your credit rating

    • Make sure you have enough income to cover your monthly repayments

    • Keep your business accounts up to date

    • Use an accountant to help you organise your taxes

    • Reduce or eliminate your outstanding debts

    • Use the services of an experienced mortgage broker

    The majority of lenders will consider how long you have been trading when they determine your eligibility for a mortgage.

    While some will accept your mortgage application if you have been trading for less than a year, your mortgage chances will be improved if you wait until your business has existed for at least two years. This way, you will have more evidence to prove that your income is steady and that you’re able to keep your business going.

     

    Lenders are often wary about lending to borrowers with bad credit because they are worried they won’t be able to make their mortgage repayments on time. However, if you do have a poor credit history, you might still be eligible for competitive mortgage deals, provided your credit issues aren’t overly severe and you have the income necessary to make your repayments.

    But while it is possible to get a mortgage with bad credit, you should still do what you can to improve your credit score before you make your application. By doing so, you won’t be impacted by higher interest charges that will add to the monthly costs of your mortgage, and you will have access to more lenders willing to lend to you.

    To improve your credit score, you can…

    • Check your credit report for mistakes or outdated information

    • Pay your bills on time

    • Avoid multiple applications for other loans

    • Find ways to manage your existing debt

    • Make sure you are registered to vote

    • Consider getting a credit builder card

    It is possible to get a buy-to-let mortgage for £170,000 but the lender will want to make sure that the property you are buying is a good investment before approving your application.

    Your chosen lender will want to know how you’re going to find tenants for the property, as they need to make sure you’re going to earn a regular rental income from your investment.

    They might also want to know how you’re going to pay for your mortgage if you have late-paying tenants or no tenants in your property at all.

    Should you take out an interest-only mortgage (which is the common choice for most landlords), the lender will also require you to have a plan in place to repay the capital at the end of the loan term.

    Learn more about interest-only mortgages.

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    Grant Humphries (CeMAP)
    Grant Humphries (CeMAP)

    Grant Humphries (CeMAP) is a proficient Mortgage & Protection Adviser at YesCanDo Money. With a career spanning since 2001, Grant has honed his expertise in understanding lenders' criteria, complex financial situations, and the nuances of the mortgage market. His deep knowledge enables him to provide tailored solutions, especially for professionals and those with unique financial profiles. At YesCanDo, Grant's commitment to excellence is evident. He takes pride in guiding clients through their mortgage journey, ensuring they feel confident and informed at every step. From first-time buyers to seasoned investors, Grant's analytical approach and dedication make him a trusted adviser in the financial landscape

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