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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: 8th September 2020*

Hopeful borrowers often ask us “how much mortgage can I get for £400 per month?”. 

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

According to the Office for National Statistics, the average UK household paid about £625 a month for their mortgage in the tax year 2017-2018. So, whilst £400 a month is a little lower than the average, it’s not unreasonable, as you’ll soon see.

In this article, you’ll learn how the monthly repayments on your mortgage are worked out, and what you might need to get a mortgage for 400 a month.

Want to see if you could get a £400 a month mortgage? Get in touch and one of the experts we work with will help you find out what’s possible for you.

Here’s what you’ll learn in this article 

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Can I get a mortgage for £400 a month?

Yes. £400 is below the average monthly mortgage payment on a UK property, but options are available and the advisors we work with can lay them out for you.

What determines if I can get a £400 a month mortgage?

There are two things that really affect how much you pay a month:

  • The amount of money you borrow
  • The Interest rate you pay on it

These, in turn, are affected by the following factors….

  • The kind of mortgage you get: Broadly speaking, there are two kinds – ‘interest only’ and ‘repayment’.
    • Interest only mortgage: Monthly repayments are lower on an interest-only mortgage than they are on a repayment mortgage, but you need to pay the full balance of the loan (minus the interest) at the end of the term.
    • Repayment mortgage: In a repayment mortgage, your payments cover the loan and the interest. 
  • The size of the mortgage itself: The less you borrow, the less you’ll have to pay, everything else being equal. 
  • The term of the mortgage: Generally speaking – the longer the length of the mortgage, the lower your monthly payments, but the more you pay over time.
  • Whether you pay your arrangement fees ‘up front’: Whilst some mortgages are advertised as ‘fee-free’ the reality is that these fees are bundled into your monthly repayments instead – which means that if you don’t pay your arrangement fees up front you could have to pay out more each month.

What mortgage can I get for 400 per month?

Now that you know some of the factors that determine your monthly mortgage costs, we can look at some rough figures – taken from mortgages that are live at the time of writing. 

£400 a month could get you:

  1. £132,000 – 60% loan to value, 2 year fixed, over a 35 year term at 1.39%
  2. £59,400 – 90% loan to value, 2 year fixed, over a 15 year term at 2.64%
  3. £90,000 – 90% LTV, 2 year fixed rate, over a 24 year term, at 2.2%

This assumes:

  • You have good credit 
  • A lower loan to value 
  • A longer mortgage term 
  • A shorter product term, – i.e. you’d be getting the best rates with a short term, fixed-rate mortgage
  • You pay your product fees up-front – i.e. if you go fee-free, the costs would be factored into your monthly repayments (instead of up front), which would also cost you more over time as they’d incur interest?

A five-year fixed rate mortgage on these numbers would likely cost around £25 a month more in both cases. There’s greater uncertainty with a longer fixed rate, so lenders build in more ‘headroom’ to counter any potential interest rate rises.

Can I get a 30-year mortgage for 400 per month?

Possibly. It depends on how much you borrow and the interest rate on the loan.

As 30 years is slightly longer than the average mortgage length of 25 years, you’d likely be looking at a lower interest rate. This increases the odds of getting a mortgage at (or below) the £400 mark. 

This, of course, assumes that your credit is clean and that you don’t have any other factors that could cause a lender to see you as a risk. 

If you’d like to know for sure, get in touch – one of the mortgage experts that we work with will take a look at your circumstances to see what’s possible. 

I’m on a low income. How much mortgage can I get for 400 a month?

A lot of people on low income think that they’ll never be able to get a mortgage, which is not true. 

Whilst a minority of lenders set minimum income caps (usually for buy to lets), lots don’t – and many lenders will take other income into account, such as benefits or freelance work.

If you’re on a lower income and wondering how much mortgage for 400 per month you can get, drop us a line and one of the expert advisors that we work with will take a look for you.

Where can I find a £400 per month mortgage calculator?

There isn’t really a calculator out there designed specifically for £400 a month mortgages. 

However, you can use our mortgage repayment calculator to see how much a certain mortgage could cost you, factoring in interest rate changes, loan sizes and so on.

If you’d like to know for sure – drop us a line, and one of the experts we work with will give you a firm answer.

Talk to an expert broker about £400 a month mortgages today

If you have questions about £400 a month mortgages and want to speak to an expert for the right advice, call Online Mortgage Advisor today on 0808 189 2301 or make an enquiry.

Then sit back and let us do all the hard work in finding the broker with the right expertise for your circumstances.  We don’t charge a fee and there’s absolutely no obligation or marks on your credit rating.

Updated: 8th September 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.