How Much Mortgage Can You Get For £3,000 Per Month?

In this article, we will look at what sort of mortgage you can get for £3,000 per month and some steps you can take to make your budget go even further.

What mortgage can you get for £3,000 a month?

For £3,000 a month, many variables could affect the mortgage amount you could borrow. These include the deposit size, mortgage interest rate, and mortgage term (how long your mortgage will be borrowed for). 

However, to get a rough understanding of how much mortgage you could borrow if you want to spend £3,000, see the illustration below, which gives examples showing how the difference in interest rate can change the amount you could borrow.

Over a 25-year mortgage term, the amount you could borrow could range between £465,600 to £568,300 if you wanted to spend £3,000 per month.

If you think the mortgage term or the interest rate might be different to the above examples, you can use the repayment calculator below to check how much you might be able to borrow:

Factors impacting mortgage size and repayments

Each of the following factors relates to the size of your monthly mortgage repayments.

Property value and deposit size

Naturally, the size of your monthly repayments will tend to increase if you buy a more expensive property, but a higher deposit could offset this. Higher deposits should also unlock better rates, as you’ll have a larger pool of lenders.

For example, if you’re a first-time buyer with a 10% deposit, you could buy a £650,000 home (with a £65,000 deposit) and your initial repayments would be approximately £3,000 a month.

However, if you’re further along the property ladder and have been paying off a mortgage for many years, you might have built up a lot of equity at that time. With a deposit of £650,000, you could potentially buy a £1.2 million home at the same monthly repayments.

Repayment term

Plenty of mortgage options with shorter or longer terms, ranging from 10 to 40 years.

Changing the mortgage repayment term greatly impacts the size of your monthly repayments but will also change how much you spend overall. Shorter mortgages have higher monthly payments but will cost you less than a longer-term mortgage.

Which option you choose depends on your circumstances. For example, if you want to buy a £1 million home and deposit £150,000, a 40-year repayment term and an initial rate of 2.93% would result in a mortgage of just over £3,000 a month.

Someone who is much later in life might have equity of £675,000 to put towards the same home. With an initial rate of 2.05%, they could choose to repay their mortgage over 10 years for around £3,000 a month.

Mortgage rate

Mortgage rates are mainly dictated by the Bank of England base rate, and the lower the rate, the less your monthly repayments.

Your rate will depend on:

• Your deposit size. If you have a large deposit, you’ll usually be able to find a better rate than someone with a small deposit.
• Your credit history. If you have a good credit history, you’ll have more mortgages and may find a better rate than someone with bad credit.
• Your rate type. If you choose a fixed-rate mortgage (as most buyers do), you’ll pay a little more initially than someone who chooses a variable-rate mortgage.
• Your initial period. Fixed rates are usually guaranteed for 2, 3, or 5 years, with some lenders offering lower rates for longer-term commitments, depending on the economic climate.
• Your lender. All lenders are free to establish their rates, so it’s important to shop around to find the best available rates at the time.

Factors that determine affordability

One of the final hurdles in getting a £3,000 a month mortgage is passing the lender’s affordability checks. They must assess whether you can repay the amount you’ve applied to borrow over your requested repayment term.

They’ll look at your income, spending, and debts to do this. Your employment status, credit history, and profession can also affect your chances of approval.

One rule to remember is that lenders typically cap the amount they’ll approve based on a multiple of your income. For most lenders, it’s 4-4.5 times your income. So, to buy a £700,000 house with a £70,000 deposit, you would probably need an income of upwards of £140,000. If you’re applying for a joint mortgage, this would be your combined income.

You can use the mortgage affordability calculator to see how this could look for you based on your annual salary:

Finding a broker experienced in larger mortgages

As the examples show, a £3,000 a month mortgage can look very different for different buyers. The unique details of your property purchase and financial situation all determine which mortgage is best for you.

That’s why it’s essential to get a broker who understands your needs and has experience finding mortgages for buyers in similar circumstances. They’ll help you tailor the variables to result in monthly repayments you can afford.

We offer a free service to match you with a specialist broker based on some of your personal details. Then, you’ll be connected with them for a no-obligation chat to see if they’re right for you. To try it today, call us on 0330 818 7026 or enquire.