If you’re seeking to purchase your dream home with a £600,000 mortgage, it is essential that you research and understand the associated monthly repayments. This amount of mortgage is three times the average mortgage in the UK so it will likely require an elevated level of income along with additional requirements explored in this guide. Utilise these key points to help reduce any challenges related to taking on such a large debt and make sure that your financial goals are achievable!
£600000 mortgage repayments
For a £600,000 mortgage with a 5% interest rate over a 30-year term, the monthly repayments amount to £3,220.
However, the total cost will rely heavily upon several personal financial factors such as:
This guide explains what affects the repayments of a £600,00 mortgage and what you can do to qualify for a mortgage of this size.
How does the interest rate affect the £600,000 mortgage monthly repayments?
Currently most lenders offer interest rates from 4% – 6%. The rate you are offered will depend on the size of your deposit, your credit history, and the mortgage type. The higher the monthly interest rate, the higher your monthly repayment will be. Therefore, it’s crucial to take the necessary steps to secure a lower interest rate on your mortgage to reduce the monthly repayment interest total.
You can reduce the monthly repayment interest total on your mortgage by:
- Increasing the size of your deposit
- Improving your credit score
- Choosing your loan term carefully
- Shopping around for a more affordable mortgage
How does the mortgage term affect monthly mortgage payments?
Mortgage terms typically range from 15 to 40 years, with the most common choice being a 30-year term. This offers a balance between monthly affordability and total interest paid, but borrowers can opt for shorter or longer terms to suit their financial goals and circumstances.
It’s sometimes advisable to opt for a longer term as this is one way to reduce your monthly repayments. This will help you make savings each month, although it’s worth noting that the total capital repayment of your mortgage will be larger due to the extra and total interest paid over the lifetime of the loan.
Short-term mortgages come with lower interest rates, but the monthly repayment will be higher because the mortgage will be spread over a smaller period.
When deciding on the loan term, it is advisable to consider how much you can feasibly afford to pay each month. The table and graph below indicate how much you will be expected to pay on a £600k mortgage at 5% interest between 5 and 30 years.
Monthly Repayment Amount for a £600,000 Mortgage
The table and graph below show how the interest rate and loan term can affect the monthly repayments each month on a £600,000 mortgage. These are example calculations only, as your actual repayments may vary.
How does the mortgage type affect £600,000 monthly mortgage payment?
The interest on your mortgage will be calculated differently depending on the type of mortgage you choose.
Fixed-rate mortgage: Your interest rate will be fixed over a set period of time. At the end of the timescale, you can negotiate a new mortgage fixed term rate, or you can let your mortgage revert to your lender’s standard variable rate.
Tracker mortgage: Tracker mortgage interest rates will change in line with the Bank of England base rate during the duration of your mortgage. If the base rate is low, this can make your mortgage more affordable than some fixed-rate mortgages, but if the base rate increases, you may have to pay more interest than someone on a fixed mortgage deal.
Interest-only mortgage: Your monthly repayments will be lower as you only pay the interest on your mortgage. However, an interest-only mortgage usually can come with a higher rate of interest, so this might not be the cheapest overall option for you. You also have to make the capital repayment in full at the end of your mortgage. A standard repayment mortgage may be a better alternative for you, despite the higher repayments, if you are worried about paying the capital at the end of your term.
Which type of mortgage is best for you?
Trying to make a choice between the array of mortgages out there can be daunting. But our experienced online advisors are here to help! With access to exclusive mortgage deals and tailored advice based on your individual financial situation, we will work with you every step of the way so that you get the best mortgage for your needs. Contact us today and let’s find what works for you!
What deposit do you need to get a mortgage of £600,000?
The higher your deposit or the higher your mortgage loan to value (LTV) the better, as this will give you access to a wider selection of mortgage lenders and lower mortgage interest rates alongside lower monthly payments.
An 80% loan-to-value mortgage with a 20% deposit would be better than a 90% LTV mortgage with a 10% deposit, for example.
Of course, it all depends on your financial situation. If you can’t afford the deposit for a mortgage with a lower LTV, there are lenders who may consider you for mortgages with a higher LTV, such as a 95% LTV mortgage with a 5% deposit. Be aware that you will be subjected to a higher interest rate if you do choose a higher LTV so the overall cost of your mortgage will be increased.
If you are interested in saving money, it’s worth saving up for a higher deposit due to the lower interest rate which will reduce the overall cost of your mortgage. If you qualify for a guarantor mortgage or if you’re a first-time buyer eligible for a government scheme, you may be in a better position to pay for the down payment and any fees associated with the mortgage.
Loan-To-Value Ratios and Deposit Requirements for a £600,000 Mortgage
This graph and table compares Loan-to-Value (LTV) ratios with deposit requirements for a £600,000 mortgage. It showcases how a lower LTV requires a higher deposit, providing a quick reference for potential homeowners to understand their upfront investment relative to different mortgage amounts.
£600,000 Mortgage Repayment Comparison
This graph and table compares details the total amount you will pay on £600k mortgages with a 5% interest rate over different mortgage terms.
£600k mortgage calculator
Our mortgage advisers can calculate what your expected monthly mortgage payment will be based on the factors discussed within this guide and your set of circumstances. Contact us to learn more but in the meantime, get an immediate estimate of the cost by using our mortgage calculator tool below.
How much do you need to earn to get a £600k mortgage?
Before a mortgage lender lets you borrow money for a £600k mortgage, they will multiply your income by specific figures.
Most mortgage providers use calculators to ascertain your mortgage affordability for the amount you can borrow however these are roughly based on income multiples. The average income multiple used is 4.5x but if you’re a high earner and you can put down a deposit of 25% or more, you may qualify for a higher income multiple, such as 5x or 6x, for example.
The table below gives you an indication of the amount you need to earn to qualify for a £600k mortgage based on different income multiples.
Income Multiples for a 600,000 Mortgage
This graph and table displays the required income levels for obtaining a £600,000 mortgage at various income multiples, ranging from 4 to 6. It illustrates how higher income multiples allow for lower individual income requirements.
How many people have a £600,000 mortgage?
Below is a bar chart that shows the breakdown of YesCanDo customers’ mortgage amounts in 2022.
The graph clearly shows that £600,000 mortgage amounts are far higher than the average mortgage amounts of £100k-£300k. This is due to the fact that in 2021, a typical UK mortgage size was a £150000 mortgage, As 2022 turned into 2023 the mortgage size grew to around £200,000 – which accounts for nearly 66.66% less than a mortgage amounting to £600,000. That’s why it is absolutely essential if you are buying a property in 2024 you find an experienced mortgage broker who will fight on your behalf so you can get approval for your desired borrowing amount! – Steve Roberts
How to get accepted for a £600k mortgage
Follow these 4 vital steps to improve your chances of mortgage approval.
- Organise Your Finances: When you apply for a mortgage, the lender will assess your affordability based on various earning sources. Ensure you have the required paperwork, such as your payslips, tax overviews, and employment contract. Other earning sources like bonuses, dividends, and government benefits can also improve your affordability.
- Pay off Debt and Reduce Spending: Credit cards, payday loans, and other debts can affect your mortgage application. To avoid that, pay off as much outstanding debt as possible, cancel unnecessary subscriptions, and switch to cheaper utility providers. Calculate your budget and see how much money you have left after your expenses have been paid.
- Improve Your Credit Score: Low credit scores may result in the rejection of your mortgage application or increased interest rates. Therefore, check and compare credit reports held by the three main credit reference agencies, correct errors or fraud, and ensure your payments are timely. You can also get a credit builder card and maintain a low credit utilization.
- Use a Whole-of-Market Mortgage Broker: Seeking professional advice from a fee-free broker can help you find the best mortgage deals that fit your circumstances. They have access to exclusive deals from specialist lenders that are not available elsewhere, can compare deals on your behalf, and support you from your mortgage inquiry to completion. Contact us today to benefit from our experienced services.
