£5,000 Per Month Mortgages

In this article, we’ll explore how much you could potentially borrow for £5000 per month, the factors that will impact your borrowing, and how a broker can help you to maximise your budget.

What size mortgage can you get for £5000 per month?

As a ballpark figure, a mortgage in the region of £1 million is feasible. However, it’s important to realise that having £5000 per month spare doesn’t mean that you can get a mortgage where the repayments are that high. You’ll need to be earning significantly more than this to satisfy mortgage affordability criteria for this level of repayment.

Other factors that affect how much you can borrow include your deposit, interest rate and term length. The table below demonstrates how much of an impact these factors could have on the amount you can borrow. In these cases alone, small changes to these variables can result in a difference of over £350,000:

What if you had some flexibility in your monthly repayments?

Small changes to your monthly budget can significantly alter your borrowing potential. The following table shows the difference between £4,500 and £6,000 monthly repayments

How is mortgage affordability calculated?

Mortgage affordability is not based on having a set amount available for mortgage repayments – in this case £5,000 per month. Most lenders use a multiple of your annual income to determine how much you can borrow, however, there are also some more specialist lenders that use other affordability criteria, and they usually decide loan size and rates on a case-by-case basis.

A typical borrower can expect to be offered around 4-4.5 times their annual salary, whereas higher earners and those in certain professions may be able to borrow up to 6 times their income from some lenders. Of course, borrowing a higher multiple of your salary will mean that you achieve a larger loan, and the table below shows how this would impact different salaries.

If you earn more than £300,000 or have over £3 million in assets, you’ll be classed as a high-net-worth individual. High-net-worth mortgages are more niche, as major lenders are less equipped to assess this type or level of income, and often have caps on the maximum they will lend irrespective of affordability.

Those lenders specialising in high net worth mortgages can sometimes offer income multiples of 7 times or perhaps more for this type of client, as they are able to consider your broader financial assets alongside your income. If you fall into this niche, you will almost certainly need to speak to a broker, as the lenders in this niche tend to be accessible via an intermediary only.

How a broker can help your £5,000 budget go further

If you have £5000 per month for mortgage repayments, you’ll likely have a number of lenders vying for your application, however, to access the specialist lenders that are likely to be more generous with their borrowing, a whole-of-market broker with experience in dealing with larger mortgages is the best path to take.

The expert brokers that we work with have access to the whole of the market and close working relationships with private banks and niche lenders that can better accommodate higher earners. They can provide bespoke calculations and advice that relate to your precise financial circumstances, helping you to get a better idea of what level of borrowing you could achieve, and which lenders will offer you the best deals.

Brokers can also play a crucial role in negotiating with both lenders and estate agents on your behalf, as well as helping you to prepare and present a clear financial picture to the lender if you have more complex income and assets.

If you get in touch we can arrange for a specialist to contact you directly for a free, no-obligation consultation.

Other factors that impact how far your £5,000 will go

Whilst having a set amount available for mortgage repayments each month – in this case £5,000 – has an influence on the mortgage deal you end up with, there are a number of other factors that lenders will look at:

Deposit

The higher the deposit, the lower the Loan to Value, meaning lenders are more confident in offering a higher multiple of your income and more preferential interest rates.

Mortgage type

At £5,000 per month, most mortgage types are available. However, some will arrive at more expensive rates than others, such as buy-to-let and commercial mortgages. You may also consider an interest-only mortgage to lower your repayments, as you will only be paying the interest element of your mortgage.

Length of the mortgage term

The table at the top of this page reflects the impact of the mortgage term. It stands to reason that the longer you have to repay the loan, the more you will be able to pay it back. Whilst older borrowers may not be able to achieve the term lengths necessary, there are specialist finance products that could help, such as retirement interest only and lifetime mortgages.

Interest rate

Each lender will have their own range of interest rates, and the more closely you match their criteria, the easier it will be to secure the most competitive of these rates. The reason that this impacts how much you can borrow is that your affordability can be stretched further when less of your budget is used to service interest.

Credit history

Even those with a large income can be impacted by bad credit, as many lenders will be looking to your credit history to confirm your reliability in repaying loans. If you have a history of adverse credit, however, there are bad credit lenders available, and they may be able to help you better utilise your budget.

Property type

Some lenders will offer lower income multiples or refuse to borrow on certain non-standard construction properties, such as listed buildings.

Get matched with a broker specialising in large mortgages

If you’re looking to make the most of your £5000 per month budget, the most sensible option would be to approach a whole-of-market mortgage broker like those that we work with. They can help you to secure the level of borrowing you’re looking for, and ensure you secure the most competitive rates of interest for your circumstances.

The likelihood is that you’ll be looking at properties valued at £1million plus, which means that you will definitely want to access the more niche lenders and private banks that can accommodate large mortgage loans.

To be matched with the broker who is most suited to your needs, simply call us on 0808 189 2301 or make an enquiry.