How to get a £200,000 mortgage
If you’re looking for the best rates and overall terms for a £200,000 mortgage the smart first move is to speak with a mortgage broker rather than trying to search yourself or approach a lender directly. An experienced mortgage broker will already have a complete grasp on the best interest rates available, based on the type of mortgage you’re looking for and your own personal circ*mstances. This will save you a lot of time and, potentially, some money too.
Your broker would also be able to advise what size deposit you’ll likely need in order to qualify for the best mortgage rates (which are typically better, the more deposit you have available) and what salary will be required for a £200,000 mortgage. All of these factors are covered in more detail in the sections below, but to give you an idea of what to expect:
- Most mortgage lenders would require a deposit of at least 10% – so, for a £200,000 mortgage this works out at an equivalent property value of £220,000 with a £20,000 deposit
- The size of salary you would likely need would be around £45,000 (this can be on a joint basis if applying with a partner), which equates to 4.5 times annual income
- At the time of writing (July 2023) average mortgage interest rates are between 5.5%-6%. On that basis your monthly repayments for a £200,000 mortgage over 25 years would be between £1,228-£1,289
Monthly repayments for a £200,000 mortgage
The exact amount you will repay each month and overall will depend on the length of your mortgage term and your interest rate.
The following table shows how both term and interest rates can impact how much you will pay every month on a £200,000 repayment mortgage:
| Term in years | 3% | 4% | 5% | 6% |
| 20 | £1,109 | £1,212 | £1,320 | £1,433 |
| 25 | £948 | £1,055 | £1,170 | £1,289 |
| 30 | £834 | £954 | £1,074 | £1,199 |
| 35 | £770 | £885 | £1,010 | £1,140 |
The above are example calculations only and your actual repayments may vary. Speak to a broker for bespoke calculations
To see how the repayments work out using different interest rates and terms than those show above, take a look at our repayments calculator here:
How much salary do you need for a £200,000 mortgage?
The amount of mortgage you can secure is usually determined as a multiple of your income, with many mainstream lenders capping this at 4.5 times your annual salary. So, for a £200,000 mortgage you’d need to have an annual income of around £45,000. There are some lenders who will go to 5 times your annual salary, or even 6 times depending on other factors, meaning you could potentially get a £200,000 mortgage with a salary as low as £33,000 a year.
Don’t forget that if you’re applying for a joint mortgage, the multiple will count on your joint incomes. Some lenders will reduce multiples slightly for joint applications, but even with only a 4 times income multiple, that means you would only need to earn £25,000 a year each to qualify.
The table below shows how far your salary could stretch based on these income multiples…
| Annual salary | 4.5 x income | 5 x income | 6 x income |
| £35,000 | £157,500 | £175,000 | £210,000 |
| £40,000 | £180,000 | £200,000 | £240,000 |
| £45,000 | £202,500 | £225,000 | £270,000 |
If you’d like to see how this would look using your own annual salary, use our mortgage affordability calculator here:
How much deposit do you need?
The usual minimum deposit requirement on a £200,000 mortgage is 10% of the property’s value. It is possible to get a mortgage with a deposit as small as 5%, but you may have to compromise on rates. Ideally if you can afford a bigger deposit, this can get you a more competitive deal and will reduce your monthly repayments.
How a broker can help with your £200k mortgage
Using a broker to help secure a mortgage is always a good idea, but when you’re looking at affordability for a £200,000 loan it can be especially important. If you’re worried you don’t earn enough, a specialist broker will be able to research on your behalf to find the lenders who can offer you higher income multiples, or explore with you how you might be able to get a better deal with a larger deposit.
The brokers we work with have access to the whole of the market, and can often find you better deals away from the high street banks through lenders that it would be difficult to access on your own.
If you get in touch we’ll arrange for an advisor to contact you straight away for a free, no obligation chat.
Factors affecting monthly repayments
We’ve already looked at how the term and interest rates can affect monthly repayments for a £200,000 mortgage, but there are several other important factors that can play a part, directly or indirectly, such as:
Credit history
If you have a bad credit history then lenders will consider you a bigger risk and may charge you higher interest rates on your £200,000 mortgage, meaning your monthly repayments will be higher too.
If you’re worried about the impact of your credit score on your mortgage, the best first step is to download a copy of your credit file, check for and correct any errors, and get a clear idea of where you stand. Bad credit does not have to mean you can’t get a mortgage – a broker who has particular experience with bad credit will have contacts with specialist lenders.
Repayment vs interest only mortgage
The type of mortgage you take out will make a big difference to how much you pay every month. A repayment mortgage, where you pay interest as well as paying off the capital each month, will have higher repayments than a £200,000 interest only mortgage where, as the name suggests, you are only paying the interest.
However, with this method, you will have to pay the whole capital amount back at the end of the loan and so you’ll need a plan in place to do this, approved by your lender, which may involve paying into savings or investments every month on top of your mortgage payments.
Fixed or variable rates
Choosing a fixed rate mortgage may mean your payments are slightly higher initially than on a variable rate, but you eliminate the risk of interest rates rising during your fixed rate period, thus making your monthly repayments predictable and secure.
