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By Pete Mugleston | Mortgage Advisor

Pete has been a mortgage advisor for over 10 years, and is regularly cited in both trade and national press.

Updated: 12th June 2020*

We get a lot of enquiries from potential home-buyers asking how big a home they can buy or how much mortgage they can get for a £1,000 per month. While we always encourage home-buyers to seek professional assistance from experienced mortgage advisors, we also share useful information to help them get an idea of their possible budget. 

Jump to our calculator journey to establish what you can afford, the costs and which of the best deals you’ll qualify for.

To help you gain an idea of what price home you can buy when paying a £1,000 a month mortgage, in this article we’ll discuss:

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What mortgage can I get for £1,000 a month?

When you buy a home, it’s usual to have a set, monthly amount that you have available to pay off your mortgage. While mortgage lenders use affordability calculations to confirm this, most of us have a good idea of what we can and can’t afford every month.

If you’ve worked out that you have £1,000 available to spend each month on a mortgage, you can then begin to have an idea of what property prices you can afford. When you know this, you can then begin deciding where to look for properties and begin viewings.

However, the size of mortgage you can secure doesn’t just depend on how much you can afford to pay off your mortgage each month.

A number of other details are important, including:

  • The size of your deposit
  • The loan-to-value rate
  • The rate of interest charged
  • The planned term, or length, of the mortgage
  • Your age
  • Your financial history

Essentially, the better your credit history and the larger your deposit, the better interest rate you will be offered and the larger mortgage you can secure.

Here’s an example:

If you have saved £5,000 for a deposit, have a good credit history and your lender agrees that you can afford to repay £1,000 per month on your mortgage, you may be able to agree a mortgage around the £195,000-£200,000 mark, at an average interest rate of 3.5%, over a 25 year repayment period.

However, if you have no deposit (usually only possible in exceptional circumstances), a short or patchy credit history, your £1,000 per month may only be enough for around a £175,000 mortgage, based on an average mortgage interest rate of 5%, over a 25 year period.

As you can see, where there are more possible risks involved for the lender, the interest rate goes up, making your monthly repayments higher. Of course, you can always consider taking a longer mortgage out, 30 year mortgage terms are very common and 35 year mortgages are becoming more popular, while some lenders are happy to lend mortgages over an even longer period.

What size home can I buy for a £1,000 per month mortgage?

Again, the answer to this question depends on a number of different details and variables associated with each individual mortgage application. If you live in an expensive part of the UK and have only a small deposit, then you may only be able to afford something small in a popular area, or something a little larger in an up-and-coming area.

However, even if you have only a small deposit and a short credit history, if the area you live in is more affordable, then the size of property you can afford to buy with a £1,000 per month mortgage will probably be bigger than in many more expensive locations.

To find out more about exactly what size mortgage you can secure with a £1,000 per month for repayments and taking into account all the other important details a lender considers, speaking with a mortgage advisor is a good idea.

If you talk to a fully qualified and experienced mortgage advisor, like the ones we work with, they can answer all your questions about what size of mortgage you can get with a £1,000 per month repayment.

What’s the biggest mortgage I can get for £1,000 per month?

As we’ve said, the size of mortgage you can secure isn’t just based on the amount you can repay to your mortgage lender each month. It also depends on your financial history and deposit size, among other details.

If you have a large deposit and your loan-to-value, or LTV rate is, say 50% – this is where you’re mortgage is for 50% of the total value of the property you wish to buy, then you could probably buy quite an expensive home. A large deposit, coupled with a low interest rate could mean you could buy a home worth £400,000 or more.

However, if you have only a small deposit, or none at all, the biggest mortgage you might be able to secure, even with a £1,000 per month mortgage repayment, is somewhere around the £175,000 level.

You can get a better idea about your specific circumstances by using our mortgage repayment calculator, which you can find here. Using different parameters, you could create your own table to show how much mortgage you can get for £1,000 per month.

As with most things in the financial world, each situation is different and based on individual circumstances. Get in touch and we’ll connect you with the right mortgage advisor for your needs who can answer all your questions and help you secure the right mortgage for you.

Over how many years can my mortgage be if I pay £1,000 a month?

The length of your mortgage, or the term you agree with your lender, depends on numerous details, your ability to repay your mortgage, being among them. However, your ability to make repayments of £1,000 per month, is not the only main points behind the mortgage term you agree.

Can I get a 30-year mortgage for £1,000 a month?

If you’re young when you buy your home and secure your mortgage, it’s more likely you can secure a mortgage with a longer term, 30 years or more. However, if you’re buying a home and you’re getting older, say 45 or more, then the mortgage term on offer from your lender will likely be shorter.

Of course, if you do wish to secure a longer term mortgage with your £1,000 a month repayment, then the right mortgage advisor can help you do that. Overall, if you’re older, but have a large deposit, a good LTV ratio and can afford to repay £1,000 per month on your mortgage, you will have more options for a longer term mortgage.

If you’re older, but have a small deposit, there will be fewer options for securing a longer term mortgage. If you have a small or no deposit and a patchy credit history, there will be even fewer long-term mortgage options for you. 

If you speak with the mortgage advisors we work with, they can help you find the right mortgage for your needs and circumstances.

How do lenders calculate my mortgage payments?

Lenders use a number of different details and criteria to calculate your mortgage repayments, even if you have £1,000 a month for those payments. They include:

  • Your earnings
  • Your debts
  • Regular outgoings
  • The LTV rate of your mortgage
  • Your age
  • An interest rate based on what’s available and determined by all the above

Following the global credit crunch of 2008 when it was discovered some banks didn’t have enough capital to shore up their institutions during times of financial difficulties and high interest rates, new rules encouraged lenders to calculate their lending to consumers on an affordability basis.

Most mortgage lenders now base their mortgage calculations on your take-home earnings, minus any regular debt repayments, plus any regular monthly payments you might make.

Even if you think you would be comfortable with paying £1,000 per month for a mortgage, you will only be able to do that if your lender’s affordability calculations confirm that to be the case.

Sometimes, it can be worthwhile waiting a few months and repaying other debts before applying for a mortgage. An experienced mortgage advisor can take you through lender affordability calculations and options available to you to try and make your £1,000 a month mortgage payments go further and secure you the home you want.

What effect will interest rates have on my £1,000 a month mortgage?

Interest rates, as set by the Bank of England, are used by lenders as a way of setting their own mortgage, loan and savings interest rates. When it comes to the effect interest rates have on your £1,000 a month mortgage, this is something you should be interested in.

When interest rates are low, in recent years some mortgage interest rates have been around the 2% mark, then your £1,000 per month can go further as the rate of interest you must pay to your lender for your mortgage is lower.

However, when the Bank of England raises its key interest rate, most banks follow suit and raise theirs. That means your £1,000 a month for your mortgage repayments can’t buy you as much debt and the mortgage you can secure is lower.

Can I still get a good mortgage with £1,000 a month repayments if I have a bad credit history?

Even if you have a bad credit history, the ability to repay £1,000 a month on a mortgage should allow you to secure a mortgage. How ‘good’ or large that mortgage is, depends on other factors, as detailed above.

If you want to know more about exactly what mortgage you can get with a bad a credit history but the ability to make £1,000 monthly mortgage repayments, then why not speak with an experienced mortgage advisor, like those we work with.

The right mortgage advisor can answer all your questions and help you understand just what mortgage is available to you with a £1,000 per month for repayments, with or without a bad credit history.

Speak to an expert broker about £1,000 per month mortgages

If you’re interested in finding out more about how much of a mortgage you can get for £1,000 a month repayments, an expert advisor can help with the right advice. Call Online Mortgage Advisor today on 0808 189 2301 or make an enquiry to speak with an experienced mortgage advisor.

Then you can just sit back while we do the hard work of finding the right broker with experience that’s relevant to your specific needs.

Updated: 12th June 2020
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FCA disclaimer

*Based on our research, the content contained in this article is accurate as of most recent time of writing. Lender criteria and policies change regularly so speak to one of the advisors we work with to confirm the most accurate up to date information. The info on the site is not tailored advice to each individual reader, and as such does not constitute financial advice. All advisors working with us are fully qualified to provide mortgage advice and work only for firms who are authorised and regulated by the Financial Conduct Authority. They will offer any advice specific to you and your needs. Some types of buy to let mortgages are not regulated by the FCA. Think carefully before securing other debts against your home. As a mortgage is secured against your home, it may be repossessed if you do not keep up with repayments on your mortgage. Equity released from your home will also be secured against it.