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. Interested in what the average mortgage in the UK is?
If you would like to speak to a mortgage adviser from 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.
How much will £300000 mortgage repayments be?
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
An example of monthly payments on a mortgage of £300000
To give you an example of what your monthly repayments might be on a £300,000 mortgage with an interest rate of 4% and a 25-year term will cost you around £1,578 a month. This is an estimate as the exact figure will depend on the various factors that we will mention in this guide.
Below is a table and graph which illustrates how your repayments will change as the interest rate or term increases.
| Loan Term (in years) | 2% | 3% | 4% | 5% |
|---|---|---|---|---|
| 20 | £1,518 | £1,663 | £1,818 | £1,980 |
| 25 | £1,272 | £1,422 | £1,583 | £1,754 |
| 30 | £1,109 | £1,250 | £1,430 | £1,610 |
| 35 | £995 | £1,154 | £1,327 | £1,514 |
Let an expert calculate your £300000 mortgage repayments – for free!
To get an idea of what your monthly repayments might be, based on the term of your mortgage and interest rate and initial rate period, use the mortgage repayment calculator below and then speak to an exclusive mortgage expert at YesCanDo Money for a more accurate figure.
£300000 mortgage calculator
Use the below mortgage calculator to work out how much your monthly mortgage repayments will be. This is a rough calculation, get in touch for a more detailed fee-free calculation.
How to get a £300000 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.
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 mortgage deals with lower interest rates.
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 |
If you’re interested in securing a £3000,000 mortgage but have the financial capacity to make more substantial payments each month, then it might be worth exploring £350000 mortgage options to see if this could better serve your property goals.
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 3.5% and 5.5% so your monthly repayments could be anywhere from £1,581.25 to £1,832.50 a month.
The interest rate on your mortgage will depend on:
The interest rate and getting a mortgage approved will depend on the following 4 factors:
- the size of your deposit
- your credit history
- the mortgage type
- the term of the mortgage
To benefit from better rates of interest, you should:
Below are 4 ways you can get a better rate of interest:
- 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 lender’s standard variable-rate 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?
The mortgage term refers to the length of time you take out a loan, which can be shorter or longer than the standard 25-year term if agreed upon by the lender and if you can afford the monthly repayments. First-time buyers often opt for longer terms of 30 or 35 years. The minimum term is usually 5 years, while the maximum term is typically 40 years.
Shorter terms result in higher monthly repayments but less interest paid overall, while longer terms have lower monthly repayments but higher interest costs, resulting in a higher overall cost of the loan.
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.
| 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.
How The Repayment Type Affects Monthly Repayments
When taking out a mortgage, you can choose a repayment mortgage or an interest-only mortgage. Repayment mortgages consist of a portion of the mortgage capital and the interest charge, while interest-only mortgages only require interest payments each month, with the mortgage capital to be paid at the end of the term.
Which repayment type is best for you?
The choice between repayment interest-only mortgages depends on your current and future financial situation. While interest-only mortgages have lower monthly payments, you need to save up for the final payment. Mortgages that are on a repayment basis are better if you want to clear your mortgage before the term ends. Contact our experienced team for personalised mortgage advice.
Interest-only Mortgages
Interest-only mortgages can be beneficial for those who want to keep their monthly repayments lower. However, the lender will require a repayment strategy and a larger deposit, usually 25-30% of the property value. Most lenders also require an above-average income to consider an interest-only mortgage.
Repayment Mortgages
Mortgages that are on a repayment basis have higher monthly repayments but leave nothing left to pay at the end of the term. This is the preferred option for many people as they don’t have to worry about raising funds to pay a final lump sum.
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.
Your debt-to-income ratio
To accurately assess your ability to afford a mortgage, your lender will need to determine your debt-to-income ratio.
Your age
Although some lenders have a maximum lending age of 70, many will extend the cap up to 75 years or higher. Therefore, you can be sure that you’ll find an option that best suits your unique needs and situation.
Bad credit
With a favourable credit score, one’s possibilities for competitive rates of interest from lenders increase. In contrast, if you possess an unfavourable credit rating and apply to a mainstream lender, your application may be declined outright.
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
Ready to purchase a home with a £300k mortgage? Our expert mortgage broker can locate the perfect affordable deal for you. By connecting you with one of our experienced and fee-free advisors, we will assess your income, occupation status, and regular expenses so that they can guide you towards the most inexpensive options available on the market.
How we find you the best £300000 mortgage deal
Our advisors have access to calculators and mortgage tools which offers access to over 14000 rates and mortgage deals – we never charge a fee for our service and we guarantee to find the best possible rate just for you!
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.
