£600 Per Month Mortgages

Putting £600 a month toward a mortgage can go a long way, but how far exactly? What that monthly amount can get you as a total mortgage will be down to which lenders are available to you, the rates they offer and how reliable a lender they perceive you to be.

This guide breaks down why each factor matters, how to get the most out of a £600 a month budget and where to go for expert advice.

What size mortgage can you get for £600 per month?

It could vary from anything around £130,000 to £170,000. That’s quite a wide range but there are other factors at play where mortgage affordability is concerned, specifically what your annual income and regular outgoings are.

These key factors – along with how lenders calculate your affordability using a multiple of your annual income, rather than what your monthly budget may be – are outlined in more detail further along in this article.

Example calculations

The length of the mortgage term you opt for and the interest rate you’re able to secure will directly impact what your monthly repayments will be. The below table of examples uses the assumption of a 10% deposit and details how these two variables might affect the total loan amount.

Being able to afford slightly more or less can also make a big difference so it’s worth seeing if there’s even an extra £50 a month you could contribute. The below tables give an idea of what £50 here and there can mean for your property search.

£550 a month

£650 a month

How to calculate your maximum borrowing

Your maximum mortgage borrowing will not be based on the amount you have budgeted for monthly mortgage repayments, in this case £600 per month.

Each lender is different and has their own way of assessing affordability alongside their own internal benchmarks that dictate what they can offer and to who. As a starting point, many use an applicant’s annual income. They’ll multiply it 4 or 4.5 times to produce a rough mortgage figure.

If you have good credit and a regular stable income some lenders may be willing to increase that to 5 times or 6 times a salary – a broker would know which are more likely to offer that.

You can use our mortgage calculator below to work out how much you can borrow based on the typical income multiples lenders use.

Other eligibility factors that could impact how much you can borrow

Of course, a mortgage isn’t just down to how much you want to pay – in this case £600 per month –  or how much you earn. There’s a number of other criteria which could indirectly affect this.

A lender has to look at your whole financial picture to ascertain if they’ll agree to lend you the amount you want and what interest rate they deem appropriate. They’ll consider:

• The deposit: 25% of a property’s total value is the ideal deposit. If 25% isn’t feasible, some lenders will accept 10% and even 5% deposits. But if you have bad credit or debt, you’ll likely need a bigger deposit to offer the lender some reassurance.
• Type of employment: Being self-employed is an issue for some lenders but others – specialists such as Aldermore Bank and Together – won’t penalise with higher interest rates. Ask a broker which ones are best to approach if this is your situation.
• Other factors: Lenders will also look at your spending habits, credit history and any debt you have. In short, you want to seem as reliable as possible so that the lender is able to offer you the mortgage you need.

How a mortgage broker can help your £600 budget go further

As of February 2022, the average UK house price sat at £277,000 – a substantially higher amount than what £600 a month can typically get you. While a broker might not be able to get you into the £200,000 bracket, the ones we work with can advise on how to ensure you sit at the higher end of what’s possible to buy at £600 a month. They can:

• Share tips on how to improve your application so that lenders are more likely to offer you lower interest rates and agree the term length you need, making your £600 go further.
• Scour the whole of the lending market to present you with a lender more willing to offer 5 or 6 times a salary.
• Negotiate a deal on your behalf, utilising their expert knowledge and experience in getting similar mortgages for other buyers.
• Find you a lender who offers high income multiples and accepts 100% of any supplemental income you might have

Can you get a buy-to-let mortgage for £600 per month?

Yes. There are no stipulations as to how much your monthly repayments must be. However, if you earn less than £25,000 a year or don’t have 25% of the property’s value as a deposit, you might find it harder to get a lender willing to offer you this type of mortgage. It’s also worth noting that most buy-to-let mortgages are interest-only so you’d also need to be able to prove to a lender that you have a repayment vehicle, aka a way of paying the full loan back in one payment at the end of the term.

Do you qualify for a government scheme with this budget?

Yes. There are multiple schemes that you could apply to. A broker would be able to tell you if you’re eligible.

There is:

• Shared Ownership: This is when, rather than buying a home on your own, you share ownership with either a property developer, if a new build, or a housing association. Typically, you’d own somewhere between 10% and 75% by putting down a 5% or 10% deposit and taking out a loan on the remaining amount you’d like. This is a good option if you have a smaller deposit, earn less than £80,000 a year and are either a first-time buyer or previously owned a home but can no longer afford one.
• Help to Buy: This scheme ends at the end of March 2023 but before then any first time buyers opting to buy a new build property can look to the government for an equity loan. This would be between 5% and 20% of the property’s value and can be used as a deposit alongside any savings you have (note that you’d need to have a minimum of 5% to contribute). The remaining balance would be covered by a mortgage which should then give you better rates and terms than you’d have without the government’s assistance.

Get matched with the right mortgage broker for your budget

In this situation, you want and need your money to go as far as it possibly can. You need an expert who acquires mortgages around the £600 a month mark on a regular basis. That way they’ll already know who you should submit your application to for the best chance of a great deal. This will save you time as well as money that’s better off going toward the purchase of your new home.

Get in touch by calling 0808 189 2301 or making an enquiry and you’ll be matched to a broker best for your situation so you can set up a free, no-obligation consultation.