£300,000 Mortgage : Monthly Repayments & Income Requirements

Your repayments on a £300,000 mortgage will vary depending on the mortgage type. Mortgage repayments are determined by the length of your term, interest rate, and the type of mortgage you get.

A longer term will mean smaller monthly repayments but will result in you paying more in the long term. The higher the interest rate, the more you’ll pay and if you get an interest-only mortgage, for example, you’ll only cover the interest charges, not the principal amount borrowed.

In this article, we’ve put together everything you need to know about what the repayments on a £300,000 mortgage could be, how much income you’ll need to earn, and the deposit amount you’ll need to apply for this mortgage. As well as the factors that might affect how much you pay and why using a mortgage broker can help secure the lending you need with the best interest rates.

How much does a £300,000 mortgage cost per month?

At the time of writing (April 2024) the average monthly repayments on a £300,000 mortgage are £1,754. This is based on current interest rates being around 5%, a typical mortgage term of 25 years, and opting for a capital repayment mortgage. Based on this, you would repay £526,131 over the mortgage term.

Bear in mind, that if you secure a mortgage with a longer term, you’ll have smaller monthly repayments but pay more over the mortgage term.

Talk to one of the advisors we work with to get a representative idea of what you might repay. They can help you secure favourable terms and lower repayments than you might get if you try to secure a mortgage by yourself.

How much do you need to earn to get a £300k mortgage?

What you can borrow is based on your salary. Most lenders will borrow 4 to 4.5 times your combined annual household income. Your annual earnings will need to be between £66,000 and £75,000 to borrow £300k. This is above the average UK annual salary, currently £34,900 (April 2024).

If your income isn’t in this range, you can apply for a joint mortgage, with your partner, for example. This way your combined earnings will be used by lenders and allow you to borrow a larger amount.

However, all lenders have different approaches to calculating how much they are willing to let you borrow for a mortgage. Some may be happy to go above 4 times your income if other parts of your application are strong enough. Some may go up to 5 times and a very select few go to 6 times.

The higher the multiplier, the less you need to earn. If you’re eligible for 6 times income – usually only available to certain professions, such as a doctor or lawyer – you would need to earn £50,000 to borrow £300k.

In these circumstances, it’s best to consult with a broker who can indicate which lenders can offer this and whether you’d meet the lender’s affordability criteria.

Example calculations

This table shows how your income and the provider’s income multiples combine to show your maximum borrowing capacity:

The above table is for comparative purposes only. Talk to the advisors we work with for the most up-to-date information on affordability criteria.

If you’d like to see how this works out for yourself, based on your annual income, take a look at our mortgage affordability calculator below:

How much deposit do you need for a £300,000 mortgage?

Typically, you will need between 5%-10% of the property value (not the mortgage amount) as a deposit. So, if you were buying a property valued at £300,000 (rather than borrowing this amount) you’d need a deposit of between £15,000-£30,000 and then you’re actual mortgage would be between £285,000-£270,000.

If you wanted to borrow £300k specifically, the property values would need to be (approximately) between £316,000-£333,000 if you only have a deposit of between 5%-10%.

However, the higher your deposit the more likelihood of qualifying for the most competitive interest rates as mortgage lenders will reserve their best rates for mortgages with the lowest loan-to-value (LTV). A larger deposit will also reduce your monthly repayments, which won’t be the case if you have a low deposit.

If you have issues with bad credit, most lenders will require you to have a deposit of around 25% to mitigate the risk of lending to you. You might also need a larger deposit if you want to get a mortgage for a non-standard construction property, such as a property with a thatched roof.

It’s not completely out of the question to secure a mortgage for £300,000 with no deposit at all, but this is extremely rare at the moment.

You can see how this works on our calculator below.

How to get a £300,000 mortgage

After you’ve found a property you like and made some calculations, your next step in your mortgage application should be to find a mortgage broker with experience in arranging mortgages of this amount. This will boost your chances of getting approved at the best terms available.

Using our free broker-matching service you can speak to the right broker by simply enquiring online. They’ll be able to help with:

• Deposit requirements: You’ll need to save a minimum deposit of 5% to 10% for a £300,000 mortgage. How much this figure will be depends on the value of the property, but a 10% deposit on a £300,000 house would be £30,000. A simple way to help you save money is to set up a savings account and put a percentage of your monthly wage, around 10 to 15%, into the account each month.
• Downloading and optimising your credit reports: It’s important to review your credit history before you apply for a mortgage, checking for any inaccuracies or outdated information that can be removed beforehand.
• Gathering all the necessary paperwork required for your application: Your broker will be able to guide you through the application process and all the typical documents required – proof of income, at least three months of bank statements, personal ID, proof of address, evidence of deposit, latest P60 form etc.
• Working out how much you can borrow: You might assume that £300,000 is the maximum you can borrow for a mortgage based on typical lender salary multiplier calculations. However, this might not be the case. A mortgage broker can assess your circumstances and eligibility for better deals from lenders, potentially allowing you to borrow more at better interest rates.
• Finding the right lender and securing the best deal for you: Your mortgage broker will be able to identify those lenders offering the best interest rate terms available across the whole market.
• Guiding you through the Mortgage Process: Applying for a mortgage can be challenging, especially if it’s your first application. The right mortgage broker can assist you with any issues you may encounter along the way, safeguard your interests, and provide support if anything goes wrong.

Example monthly repayments for a £300,000 mortgage

Our mortgage repayment tables will give you an idea of how much monthly payments on a £300k mortgage will be, based on a standard capital and repayment method.

For a more accurate, bespoke figure, using the most competitive rates available at that time, get in touch and we’ll match you with one of our expert brokers who can help.

For interest-only mortgages, the repayment remains as is regardless of the term. So, for example, the repayment shown for 6% – £1,500 per month – would be the same if you opted for a 15-year term or a 30-year term as the capital owed doesn’t reduce and is paid off in full at the end using a separate repayment vehicle.

See how this works in the table below:

For the purpose of these tables, we assume the interest rate stays the same for the full length of the mortgage. Interest rates can change if you remortgage to a different rate or move from a fixed or discounted deal to the lender’s standard variable rate (SVR).

With the Bank of England base rate currently at 5.25% (April 2024) and the average mortgage rates between 5%-6% the repayment figures under these columns would be the most realistic. However, as the base rate falls in the future, mortgage lenders should follow suit and reduce their rates too.

Factors that affect monthly repayments

In addition to those mentioned above – interest rate, loan term, deposit, mortgage type and repayment method – your repayments can also be affected by several other factors indirectly, such as your age and credit history, as these could limit the number of lenders willing to consider your application.

A broker will consider these and match you with the right lender. They also get access to exclusive deals and can negotiate with lenders on your behalf, saving you both time and money.

Interest rates

The rate you secure will influence the monthly cost. Everything else being the same, a higher interest rate will mean you pay more for a £120k mortgage monthly. The rates available on the market can vary. So, it’s important to deal with a lender who can offer the most competitive rate for your circumstances.

Fixed or Tracker

You’ll also have the option to choose between a fixed rate vs a tracker mortgage. Usually, a fixed rate will be higher, increasing your monthly repayment. But, locking in a rate can allow you to better plan your finances.

Term Length

How long you take out a mortgage for can affect your rates and directly impact your monthly cost for a £120k loan. A longer term will likely reduce your monthly repayments, but it usually means paying more over the life of the mortgage.

If you don’t match the eligibility criteria for high street lenders, you may still be able to get a good rate by approaching a specialist lender that is more sympathetic to your situation. This can include applicants looking for bad credit mortgages or mortgages for self-employed people. The best way to find these lenders is by using the services of an experienced mortgage broker.

Your age

Although it’s possible to get a mortgage at almost any age, time on your side can lead to better deals from lenders. This could mean lower rates and monthly repayments for your £300,000 mortgage.

Your credit history

If you have blots on your credit history, this might result in your lender charging you a higher interest rate to mitigate the risk of lending to you. A broker who specialises in mortgages with bad credit can help you find the best rates given your circumstances.

If you’re unsure what your credit score is or want to check before you go any further, use the free tool below:

Additional costs to consider

There are several other additional charges to consider that may impact the monthly costs when setting up a mortgage worth £300,000. Speaking to a mortgage broker about the costs listed below will give you more information about what they entail and ensure you have no unpleasant surprises.

Product fees

Some mortgages come with fees to set them up, such as some of the ones listed below:

• Arrangement fee: Also known as a product fee or booking fee, this is charged by your lender and either paid upfront or added to the cost of your mortgage. Remember that adding it to your mortgage will increase your monthly repayments and incur more interest. The size of this fee varies quite dramatically but is usually in the region of between £1,000-£2,000.
• Booking fee: Lenders typically charge this fee for borrowers to secure a certain product such as a fixed rate or a discount deal. It’s usually between £100-£200.
• Valuation fee: Your lender will carry out a valuation to check you’re paying what the property is worth. This will typically cost you anywhere between £250 and £1,500, depending on the complexity involved.
• Survey fee: A survey checks the general condition of the property you’re buying, including looking for any structural damage or damp. It can cost between £200-£600, depending on how in-depth you want the survey to be.
• Land registry fee: This is essentially an admin fee you pay to the Land Registry for them to change the register entry to your name. It only applies to properties valued at £100,001 and above. The fee ranges from £45 to £145 depending on the property’s value.
• Stamp Duty: This is the tax you pay when buying a property. How much stamp duty you pay will depend on the property’s price, whether you’re a first-time buyer or not and if this is a main residence or second home.
• Conveyancing fee: This covers all the legal work associated with buying a property and can cost up to £2,000.

Insurance

When considering a mortgage, you’ll likely need to account for additional insurance costs. These may include:

• Home insurance: Covers your property against damage or loss.
• Life insurance: Provides coverage for the mortgage in case of your death.
• Income protection: Helps if you’re unable to work due to illness or injury.
• Critical illness cover: Assists if you’re diagnosed with a serious medical condition

Why use Online Mortgage Advisor?

If you’re looking to buy a property with a £300,000 mortgage, a broker specialising in this bracket size is best placed to help you. They have relationships with all the lenders and know exactly who to approach based on your circumstances.

Our broker-matching service can connect you with an expert who will help you find the deal best suited to your specific circumstances. Give us a call on 0808 189 2301 or make an enquiry and get matched with an expert today for a free initial conversation.