£150,000 Mortgage : Monthly Repayments & Income Requirements

If you want to borrow £150,000 to purchase a property, read on to see what your repayments could be and how much income you’ll need.

Home Mortgage Repayments £150,000 Mortgage : Monthly Repayments & Income Requirements

Author: Pete Mugleston

Mortgage Advisor, MD

Reviewer: Nathan Porter

Independent Mortgage Advisor

Updated: March 15, 2024

How we reviewed this article:

Our experts continuously monitor changes in the financial space and work closely with qualified mortgage advisors for factual verification.

October 3, 2022

In this article, we’ll look at what the monthly repayments for a £150,000 mortgage could be, how much annual income you’ll need for this amount and why using a mortgage broker can help you secure the lending you need at the most competitive interest rates.

First, use our calculator below to get an idea of how much a mortgage of this amount could cost each month based on different terms and interest rates.

Mortgage Repayment Calculator

This calculator can tell you the monthly and overall cost of your mortgage, based on the loan amount, interest rate, and term length.

Enter the amount you're borrowing
£
2.5% is an average figure but the rate you get may vary
%
Enter the mortgage term, 25 years is the average but lenders can offer shorter and longer terms
years

Your Results:

The monthly repayments on a mortgage would be

The total amount paid at the end of your mortgage term would be

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How much does a £150,000 mortgage cost per month?

There are a number of factors that could affect your monthly repayments, which means there’s no definite answer to this.

As an example, based on a standard capital and repayment mortgage with a typical interest rate currently of 5.5% and a term length of 25 years, you should expect to pay £921 per month. Generally, however, the repayments on your mortgage will depend on the following factors:

Length of the mortgage term

The longer the term, the lower your payments will be than for a shorter term but with more interest to pay overall.

For example (using the same interest rate of 5.5%), if you repay £150,000 over 10 years, your monthly repayments would be £1,628, whereas the same amount borrowed over 35 years would equate to repayments of just £806, but the total amount of interest paid over the course of 35 years would be much higher.

Interest rates

Quite simply, the higher the interest rate, the higher your monthly repayments will be. Choosing the type of mortgage deal you prefer can also be a factor. If you select a fixed-rate mortgage the monthly repayments will remain the same, whereas a variable-rate deal (such as a tracker mortgage, for example) there’s no such guarantee so the repayments will go up and down in line with the Bank Of England base rate.

A mortgage broker will be able to find which mortgage lenders offer the most competitive rates – across a range of different mortgage types – at any given time.

Mortgage repayment method

This table demonstrates how much lower payments on £150,000 are on an interest-only mortgage, versus a capital repayment method (based on an interest rate of 6%). However, it’s important to note that this is because you do not repay any of the original loan amount over the term of your mortgage.

Instead, at the end of the term, the entire loan becomes payable in one lump sum, and you’ll therefore need a suitable repayment vehicle in place to qualify for this type of mortgage.

Repayment Period Monthly payment on capital repayment mortgage Monthly repayment on interest-only mortgage
5 years £2,900 £750
10 years £1,665 £750
15 years £1,266 £750
20 years £1,075 £750
25 years £966 £750

(You’ll note that repayments on an interest-only basis remain unchanged regardless of the term – that’s because the capital owed to the mortgage lender stays the same throughout the term and is repaid in full, using a separate repayment vehicle at the end).

How much do you need to earn to get a £150,000 mortgage?

As a guide, most lenders use an income multiple of between 4 and 4.5 times your annual salary to determine the maximum amount you can borrow.

So, for a £150k mortgage, using the most common calculations your annual income would need to be:

  • £37,500, based on 4 times annual salary
  • £33,333, based on 4.5 times annual salary
  • £30,000, based on 5 times annual salary

(For joint mortgages, lenders will use the combined salaries of both applicants.)

There are also more risk-averse lenders that limit income multiples to three times income in some circumstances. Others use higher income multiples and it’s not uncommon to find specialist lenders who will consider six times income.

Example calculations

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

Income 3 Times Income 4 Times Income 5 Times Income 6 Times Income
£25,000 £75,000 £100,000 £125,000 £150,000
£30,000 £90,000 £120,000 £150,000 £180,000
£35,000 £105,000 £140,000 £175,000 £210,000
£40,000 £120,000 £160,000 £200,000 £240,000
£45,000 £135,000 £180,000 £225,000 £270,000
£50,000 £150,000 £200,000 £250,000 £300,000

The above table is for comparative purposes only. You should talk to your mortgage lender or broker 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 own annual income, take a look at our mortgage affordability calculator below:

Mortgage Affordability Calculator

Use this calculator to determine how much you could potentially borrow for a mortgage, based on the typical salary multiples used by most UK lenders.

Input full salaries for all applicants
£

Your Results:

You could borrow up to 

Most lenders would consider letting you borrow

This is based on 4.5 times your household income, the standard calculation used by the majority of mortgage providers. To borrow more than this, you will need to use a mortgage broker to access specialist lenders.

Some lenders would consider letting you borrow

This is based on 5 times your household income, a salary multiple you might struggle to qualify for without the help of a broker. This income multiple is not widely available to customers who are applying directly with a lender.

A minority of lenders would consider letting you borrow

This is based on 6 times your household income, a salary multiple you will struggle to get without a broker. Six-times salary mortgages are usually only available under very specific circumstances.

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How to get a £150,000 mortgage

After you’ve found a property you like and made some calculations, your next step should be to find a mortgage broker with experience in arranging mortgages of this amount as 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 making an enquiry online. They’ll be able to help with:

  • Working out how much you can borrow. You may have set your sights on a £150,000 mortgage, but do you definitely know you can borrow that amount? A mortgage broker, using typical lender salary multiplier calculations, will be able to quickly confirm this for you.
  • Find out what deposit you need. Your broker will be able to outline what deposit most lenders would require, based on the value of the property you want to buy.
  • 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.
  • 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. This will save you time and, potentially, some money too.
  • 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, recent bank statements, personal I.D etc.

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How much deposit do you need?

Currently, the minimum deposit requirements imposed by lenders for a residential mortgage are between 5%-10% – this is based on the property value NOT the mortgage amount.

So, if you were buying a property with a value of £150,000 (rather than borrowing this amount) you’d need a deposit of between £7,500-£15,000 at least, and then your mortgage would actually be between £142,500-£135,000.

It’s not completely out of the question to secure a mortgage for £150,000 with no deposit at all, but this is extremely rare at the moment.

For a more complex application, where there may be a bad credit issue or a mortgage involving a non-standard construction property, which will reduce the pool of lenders available, you may need a higher deposit of at least 25%.

For a buy-to-let mortgage most lenders ask for a minimum of 20%, although a mortgage broker with experience in this area should be able to identify some who will ask for less.

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).

You can see how this works on our calculator below.

LTV Calculator

This calculator will tell you what your loan-to-value (LTV) ratio is, based on the property's value, your deposit/equity and the amount you're borrowing.

Enter an amount in pound sterling
£
Property value minus your deposit/equity
£
Loan amount must be less than property value

Your Results:

Your LTV is

This means that most mortgage providers will consider your deposit amount to be more than satisfactory, but speaking to a broker is still recommended to ensure you get the best deal.

This means you’re likely to meet the deposit requirements at most lenders, but since many reserve their best rates for those with higher deposits, speaking to a broker is recommended.

Many mainstream mortgage providers would consider this high and be reluctant to lend. Applying through a mortgage broker may be necessary to find a specialist low deposit mortgage lender.

LTVs have a direct impact on the rates available to you - speak to a mortgage broker and find out how to get the best deal based on your ratio.

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Example calculations based on a loan of £150,000

The below table shows how much impact the interest rate and term of your mortgage can have on your repayments.

Term length 3% Interest 4% Interest 5% Interest 6% Interest
10 years £1,448 £1,519 £1,591 £1,665
15 years £1,036 £1,100 £1,186 £1,266
20 years £832 £909 £990 £1,075
25 years £711 £792 £877 £966
30 years £632 £716 £805 £899
35 years £577 £664 £757 £855

For the purpose of this table we are assuming the interest rate stays the same for the full length of the mortgage. Interest rates can change if you decide to remortgage to a different rate or move from either a fixed or discounted deal to the lender’s standard variable rate (SVR).

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

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Other factors impacting repayment cost

The mortgage term and interest rates that you qualify for will depend on a range of factors that could impact upon your repayments – both directly and indirectly – such as:

Factors that impact the mortgage term

Age: Most lenders, especially on the high street, impose a maximum age limit on their mortgage products, meaning you’ll typically need to have finished repaying your mortgage by the age of 75-85.

The older you are, the shorter the term is likely to be. However, not all lenders apply maximum age limits, so if you’re an older borrower, it may still be possible to achieve the term you want with the right lender. Alternatively, you can look at equity release products, which are intended for over 55s.

Factors that impact the interest rate

Deposit: The larger the deposit you provide, the lower the loan-to-value (LTV) of your borrowing. This also means you’ll qualify for the more competitive interest rates on offer from mortgage lenders – and the lower the rate, the lower your repayments will be.

Credit score: Most lenders reserve their most competitive interest rates for applicants with a strong credit score. It’s possible to get a bad credit mortgage, however, the interest rates are typically higher and the pool of lenders willing to consider your application will be lower.

Income type: If you’re a PAYE earner, you may get slightly better rates on the high street than self-employed applicants, as lenders consider your income to be more stable. If you’re self-employed, however, don’t worry, as there are plenty of lenders that specialise in self-employed mortgages, who will offer you competitive rates.

Type of property: As lending is all about risk, even certain property types can be considered riskier than others, meaning you’re likely to be offered less competitive rates if you buy a property of non-standard construction or a second home, as they are both seen as riskier purchases.

A non-standard construction could be viewed by a lender as risky because it may be harder to sell in the event of a repossession, whereas a second home could be risky as it may overstretch the applicant’s finances.

Other costs involved with a property purchase

When arranging a mortgage, it’s important to bear in mind that the monthly repayments will not be your only outgoing. There are a number of other costs involved with the arrangement of a mortgage, as well as the ongoing costs of home ownership to consider when planning your budget.

Below, we’ve listed some of the costs you’ll need to consider:

Solicitor/legal fees

This fee is typically between a few hundred and a few thousand pounds, depending on the property type and searches required

Arrangement fees

This type of fee will not apply to all lenders or products, but it’s important to find out if it applies, as it can be between 0.5%-1%% of the total loan amount. So between £750-£1,500 for a £150,000 mortgage.

Buildings insurance

Most lenders will insist that buildings insurance is in place prior to mortgage approval. The cost will vary depending on the price of the property and the part of the country where it is.

Broker fees

If you decide to use the services of a mortgage broker their fees will also need to be taken into account. The amount will depend on the complexity of the application. Typically, a mortgage broker will either ask for a flat fee – usually between £500-£1,000 or a percentage of the amount borrowed – usually between 0.5%-1%.

Stamp duty

This is the tax levy on residential property purchases. The tax rates for stamp duty are tiered – the higher the purchase price, the higher the percentage you are charged.

Mortgage protection

There’s no stipulation from lenders to have mortgage protection, however, it’s advisable to protect yourselves in the event of redundancy or long-term sickness.

Get matched with the right mortgage broker

Finding a mortgage broker with the exact experience you’re looking for is not always simple, but our broker matching service does the hard work for you. No matter whether you’re concerned about self-employment, age, adverse credit, or you’re looking to buy a less traditional property, such as a timber-framed building, we’ll be able to pair you with a broker who has the most knowledge in the area you need.

Every broker we work with provides an initial consultation completely free of charge, and you’ll only pay beyond that if they’re able to secure you a mortgage. Call now on 0808 189 2301 or make an enquiry, to take advantage of our free 5-star matching service.

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About the author

Pete, an expert in all things mortgages, cut his teeth right in the middle of the credit crunch. With plenty of people needing help and few mortgage providers lending, Pete found great success in going the extra mile to find mortgages for people whom many others considered lost causes. The experience he gained, coupled with his love of helping people reach their goals, led him to establish Online Mortgage Advisor, with one clear vision – to help as many customers as possible get the right advice, regardless of need or background.

Pete’s presence in the industry as the ‘go-to’ for specialist finance continues to grow, and he is regularly cited in and writes for both local and national press, as well as trade publications, with a regular column in Mortgage Introducer and being the exclusive mortgage expert for LOVEMoney. Pete also writes for Online Mortgage Advisor of course!

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Pete Mugleston

Mortgage Advisor, MD

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