Monthly Repayments on a £150k Mortgage | The Mortgage Centres (2024)

Is it possible to secure a mortgage for £150,000?

Everyone’s circ*mstances are unique, as are their borrowing requirements. As a result, mortgages come in a variety of forms and sizes. This article focuses on a £150,000 mortgage, which is currently very typical.

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What are the monthly repayments on a £150,000 mortgage?

The answer relies on a variety of factors, including:

The term: If you have a repayment mortgage, the term will determine how much you pay each month. The longer the period, the cheaper the cost, but you will most likely pay more interest. If the term is shorter, your monthly repayments will be higher, but you will typically pay less interest.

Repayment mortgage: These are the most common types of mortgages. Each month, you will repay part of the capital (the amount you borrowed) and part of the interest. This often results in higher monthly repayments, especially when compared to an interest-only mortgage. This is because the former includes a portion of the loan capital each month, while the latter solely covers the interest payable.

Interest rate: Because what you pay each month is to cover the interest on the borrowed money, the interest rate you are charged influences your repayment costs. The higher the interest rate, the more you will repay, and vice versa.

How to calculate the monthly payment on a £150,000 mortgage

If you’re thinking about getting a mortgage for £150,000, you’ll probably want to know how much the monthly repayment would be. You may do a manual calculation for this, but the method for calculating the payment for a capital and interest mortgage is very hard, so we propose that you use a repayments calculator instead. Of course, you may still use a mortgage repayments calculator to figure out an interest-only mortgage, but it is also far easier to figure it out yourself. Use this simple calculation:

Your monthly repayment = the amount of the loan x interest rate, divided by 12 (the months of the year)

For example:

£150,000 x 3% = £4,500

£4500 divided by 12 = £375 per month

Many calculators may be used to provide this information, which includes some very basic facts. These are typically:
• The amount of money you wish to borrow.
• Payback method, for example, repayment or interest only.
• The duration (this will be required in years and/or months).
• The interest rate that you wish to use. We propose that you calculate this not only at the current rate but also at a higher rate to determine your affordability in the future if interest rates rise. Remember that a mortgage is often a long-term commitment in which much might change.

If you don’t have time to use a calculator, we’ve included a rough estimate of what a £150,000 repayment mortgage may cost each month across various terms and interest rates below.

What can a mortgage broker do for you?

A mortgage broker can help you navigate the mortgage application process and ensure you only pay what is required. A mortgage broker may utilise their knowledge and skills to ensure that your mortgage demands are met not just at the onset but also throughout the life of the loan.

If you are a first-time buyer, you will not have gained any expertise from arranging a mortgage in the past, and even individuals who have owned a house before are unlikely to have put up too many mortgages. A mortgage broker works with mortgages for a livelihood and may give advice and ideas on how to best arrange a £150,000 mortgage. They are likely to be able to discuss topics with you that you have not even considered.

The consultants at The Mortgage Centres and our trusted partners have the technology to find the best-suited programme for your circ*mstances. This should provide you with the comfort you need that they are looking to secure you a mortgage that is best suited to your needs.

Other things to consider

How much money do you require to borrow? Is £150,000 required, or is it possible to borrow less? The less money you borrow (including capital and interest), the less you will have to pay. On the other hand, be sure you borrow enough. Don’t leave yourself short on funds for any ambitions you may have and then find yourself either unable to complete what you began or having to borrow additional money at a potentially higher interest rate later on. Make certain that everything you choose is within your budget.

Reduced borrowing reduces your loan to value (LTV), which is the ratio of how big your loan is in comparison to the property’s worth or purchase price. You may discover that this results in a lower interest rate. For example, a mortgage of £150,000 on a house worth £195,000 would be a 77% LTV; however, lowering the loan to £146,250 would put you at 75% LTV, and you’d likely have a higher interest rate available.

Phil Scott

Director

About the author

Phil has worked in the financial services industry since 1992, having started with a large insurance company. He went self employed in 1996 as an Independent Financial Adviser before setting up his first company, Needham Market Home Financial in 1999.

After four years, he decided to concentrate solely on mortgages and related insurances, and The Mortgage Centres was born. Since then, Phil has been influential in the opening of several new offices as the business continues to grow.

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