£2,000 Per Month Mortgage

How far will £2,000 a month get you if you decide to buy a home? The answer is a little more complicated than you might think.

We’ll explain how it all works and give you some tips to help your money stretch further.

What size mortgage can you get for £2,000 a month?

 The size of the mortgage you can get isn’t based on what you think you can afford to pay each month. It’s based primarily on your annual income, at a multiple set by the lender, the interest rate of your mortgage and the mortgage term (how long you’ll be borrowing for). Most lenders currently allow you to borrow either 4.5 times or 5 times your annual income.

To give some examples and assuming your income allows, here is an illustration showing what £2,000 per month looks like over 25 years and between a 4% and 6% interest rate.

You borrowing amount for a £2,000 per month mortgage could range between £310,400 to £378,900 

Mortgage affordability assessments will also look at your debts and outgoings, so if either of these are high, that could limit the amount you can borrow.

To get an idea of how much you can borrow, just enter your annual income into our mortgage affordability calculator below.

Factors that affect your monthly repayments

Let’s look at the factors involved and how they might increase or decrease your monthly repayments.

Mortgage term

Changing your mortgage term is one important way that you can control your monthly repayments. A typical residential mortgage has a mortgage term of 25 years, but it can be shorter or longer, which will increase or decrease your payments.

To illustrate this, we’ll show how a change in term length will affect how much you can borrow in total, based upon a £2,000 per month mortgage payment..

20 years

A mortgage term over 20 years, paying £,2000 per month will see a borrowing potential between £279,200 to £330,000

25 years

A term of 25 years will see an estimated borrowing range of between £310,400 to £378,900

30 years

A 30-year mortgage term, will enable a potential borrowing range of between £333,600 to £419,000

The above is an estimation as there are many additional factors lenders will take into account, but it should illustrate that if you borrow on a shorter period i.e. 20 years, your borrowing limits will be lower compared to if you borrow over 30 years where your borrowing potential increases considerably, even though your monthly payments of £,2000 stay the same

Mortgage rate

Your mortgage rate is largely out of your control. Mortgage rates are closely linked to the Bank of England base interest rate, so when interest rates are increasing (as they are now), monthly mortgage repayments also increase.

Your mortgage rate also depends on other factors:

Rate type

You can choose between a fixed-rate mortgage (so that your monthly payments stay the same for a certain period) and a variable-rate mortgage (if you don’t mind them going up and down). Most people choose a fixed rate, which means that your monthly payments start a little higher.

You can calculate specifically what your borrowing amount could be if you use the calculator below where you can set the borrowing amount, interest rate and mortgage term to specifically show what your monthly mortgage payment would be:

Deposit size

Buying a home with a low deposit (10% or less) limits your choice of lenders and mortgages so you’ll usually have to pay a higher rate. If you can save a larger deposit, or if you’re buying after building up some equity in property already, you’ll have access to lower rates.

Individual factors

Your profile as a borrower includes things like your employment status and credit history. It’s sometimes more difficult to get a mortgage if you’re self-employed (for example) or if you have bad credit, meaning you’ll have less choice of lenders and may not get the best available rates.

How a broker can help your budget go further

If you want to borrow as much as possible while keeping your repayments at around £2,000 a month, a broker can help with:

Personalised advice

They’ll tell you what you need to do to become eligible for a better mortgage rate, for example, by saving a larger deposit or making recommendations to improve your credit rating. 

Expert insight

Making decisions about which mortgage term and initial period are best for you can be daunting. A broker can tell you how much you’ll pay each month for a five-year fixed rate versus a two-year fixed rate, or a 25-year mortgage versus a 30-year mortgage, and help you decide whether it’s worth it.

Access to all lenders and products

If your broker has whole-of-market access (as the ones we work with do), they can compare all of the products that are currently available and recommend a mortgage from any lender. They might have access to deals you couldn’t find by going directly to lenders.

Get in touch if you’d like to speak to a broker today.

Other costs to consider

The mortgages you see advertised with the lowest monthly payments aren’t always the cheapest overall. In fact, deals offering low monthly repayments can also include high mortgage fees. When choosing a mortgage, be sure to check the arrangement fee (which can typically be anywhere from £0 to £1,499) and the valuation fee (usually around £300).

Get matched with a broker experienced in dealing with strict budgets

If you’re ready to apply for a mortgage and you want to bring your monthly repayments as close as possible to £2,000, it’s time to speak to a broker. To ensure you get the best deal, you should choose someone with whole-of-market access and experience in mortgages of this size.

We can connect you with one of the many brokers we work with based on your requirements and their expertise. You’ll just need to give us a few details to allow us to match you with the right person for a free, no-obligation chat. Get in touch on 0808 189 2301 or make an enquiry online.