Do you want to take out a £180,000 mortgage, but aren’t sure if you can afford the repayments.
If this applies to you, this article should help to give you a good idea of the cost of repayments on a 180k mortgage, an overview of factors that can affect the amount of deposit you’re likely to need, as well as how to go about getting access to the best interest rates and deals.
In this guide, we will cover:
How much are the repayments on a 180k mortgage?
How does the term affect mortgage repayments on £180,000?
What income do I need for a £180k mortgage?
What deposit will I need for a £180k mortgage?
How does Loan to Value (LTV) affect repayments on a £180k mortgage?
How much are interest only payments on £180k?
Can I get an interest only mortgage of £180k?
Other factors affecting a £180,00
Second charges or secured loans of £180k
Find a £180 000 mortgage calculator
Speak to an expert today!
For more tailored advice that takes into account your unique circumstances, get in touch with us and we’ll be happy to refer you free of charge to one of the trusted advisors we work with. All of them have access to the entire market, so they’re ideally placed to help you find the best mortgage for you, even if you’ve been turned down by lenders in the past.
How much are the repayments on a £180k mortgage?
The monthly cost of mortgage repayments on 180k will depend on a number of factors, so there is no single answer to this question. The figure is set by the lender and the interest rate they offer you, which is ultimately shaped by things like the size of your deposit, the health of your credit record, how many years the mortgage is to be spread over, and a number of other factors.
With a few known variables you can certainly get a rough estimate of your expected £180k monthly payments by using a mortgage calculator or similar tool. But we would always advise speaking to an expert as early as possible in your research so you can get a more accurate idea of what you’ll need to budget for.
By way of illustration, the below table shows the approximate monthly repayments on a £180,000 mortgage at various interest rates being applied to different mortgage terms.
How does the term length affect mortgage repayments on £180k?
As you can see from the table, the period of time over which the mortgage is repaid (‘the term’) plays a key role in determining the monthly payment on your £180 000 mortgage. The reason for this is pretty straightforward: a longer term allows more time to spread out the repayments, so each individual payment ends up being smaller.
For example, if we assume a 2% interest rate, a £180k mortgage over 30 years results in a monthly repayment of approximately £665, whereas the same loan amount spread over 5 years would be substantially higher at £3,155.
180k mortgage cost (monthly)
One of the main factors in deciding the length of mortgage term is the borrower’s age, so if you’re still a long way from retirement you’ll usually have the option of stretching out your mortgage over a longer term than someone who is nearing it. However, there is a trade-off to consider here, since a longer mortgage term can mean paying much more interest over the lifetime of the loan.
What income is needed for a £180k mortgage?
Customers often ask us: ‘how much do I need to earn for a £180k mortgage?’ This will again depend on your specific circumstances such as employment type and age, all of which affect the types of products and interest rates you’re eligible for, along with the size of deposit you plan to put down - so there is no single answer without first having a good idea of these variables.
To get a rough idea of necessary income, it’s worth noting that most mortgage providers lend approximately 4, sometimes 4.5 times your salary (or household income if it’s a joint application) but this comes with caveats and will depend on factors such as market conditions, the lender’s policies and of course your own circumstances such as employment type and age.
Other mortgage providers cap their lending at x5 the borrower’s salary and a minority will stretch to x6, under the right circumstances.
How much deposit is needed for a £180k mortgage?
The deposit you’ll pay on £180k will depend on several factors including the lender’s policy and your individual circumstances, such as credit record and whether or not you own any existing property. To an extent, it will also be determined by your own priorities, as putting down a higher deposit means you’ll own more of the property outright, which will generally result in a lower interest rate and lower monthly repayments.
How does Loan to Value (LTV) affect payments on a £180k mortgage?
The portion of the property you own outright versus the loan amount you intend to borrow is known as the ‘Loan to Value’ ratio (LTV). For example, if you’re buying a house valued at £180k and put down a 10% deposit of £18,000, you own 10% of the property and need to borrow £162,000 - this can be expressed as an LTV of 90%.
When searching for a mortgage you’ll find that most lenders offer up to 85% LTV (i.e. they require a deposit of 15% or more) but some offer 90% and a few can go up to 95% under the right conditions. The lowest possible deposit on £180,000 would therefore be around £9,000 (95% LTV), but you would typically expect to pay at least 15% or £27,000 depending on your risk profile, and you may want to stretch to 20% or more to get the best deals.
The advisors we work with have access to the entire market and can help you to find the most favourable products at a level of deposit that suits your budget and priorities, so if you’re having trouble finding a happy medium, feel free to contact us and we’ll put you in touch with an experienced advisor.
£180k Interest only mortgage repayments
Another question we often hear is ‘how much is a £180000 mortgage on an interest only basis?’
It’s usually more straightforward to calculate this amount, because as long as you know the interest rate, the monthly figures should be the same regardless of the length of the term: see the above table for examples of monthly interest only payments on £180k at typical current rates.
How do I qualify for an interest only mortgage on £180000?
Most lenders impose stricter criteria for interest only mortgages, and you may find that you need a bigger deposit for an £180k interest only mortgage than you might do on an equivalent repayment product. Most lenders insist on a deposit of 25% or more (75% LTV), while others go up to 80% LTV and fewer still can go to 85% in the right circumstances.
You will also need to prove to the lender that you have a viable repayment vehicle in place to repay the loan balance at the end of the term.
There are pros and cons to interest only mortgages, and while some borrowers prefer the low monthly payments that come with interest only, others prefer the certainty of knowing that they are chipping away at the size of their loan with each repayment. The decision will depend on your preference and circumstances, so take a look at our guide to interest only mortgages here for more info.
What other issues can affect a £180k mortgage application
There are various other factors that might have an impact on your £180,000 mortgage application. Here are a few issues to consider:
Most lenders cap their upper age limit at 75, some at 85 and a few will lend to a pensioner of any age on standard mortgage products, as long as they’re confident the repayments will be met. If you are due to reach retirement before the end of the mortgage term you will probably need to look into a product that’s geared towards older borrowers, such as a lifetime mortgage - see our guide to mortgages in later life, here.
As mentioned above, mortgage lenders prefer to security of borrowers with regular PAYE salaries, as their future income is easier to predict. As a result, it will be easier to get access to the best rates if you’re an employee on this type of salary. But there is a growing market in self employed mortgages, so as long as you can prove sufficient income over a period of 2-3 years or more, you should find a suitable product.
Are you buying a standard construction hour or a property with unusual features such as a thatched roof, timber frame or in a very high rise block? All of these ‘non standard’ characteristics can make a property harder to sell, which means lenders see them as higher risk. For this reason they are harder to mortgage, and you might find that more lenders turn down your application or insist on a lower LTV.
Second or subsequent properties
If you’re already a homeowner and are looking to expand your portfolio with a second home or buy to let, lenders are likely to see you as posing a bigger risk due to the larger total borrowing. Expect higher rates, lower LTVs and more stringent criteria in general.
Second charges or secured loans of £180,000
Second charge mortgages or secured loans are one way to raise large sums against an existing property, without resorting to equity release, remortgages or other methods such as bank loans. You can read more on second charge mortgages here.
This type of borrowing is usually relatively easy to qualify for if you’re already a homeowner, and the interest rates are lower than those of an unsecured loan. However, they pose more risk to the borrower than the lender, as your property is used as the security. If you’re looking to take out a second charge mortgage of £180k, we can put you in touch with an advisor with specialist experience in this area.
£180,000 Buy to Let mortgages
We often hear from customers who want to know if they are eligible for a £180k Buy to Let (BTL) mortgage. Most lenders offer BTL mortgages of £180,000 provided you meet the criteria, however the deposits will usually be higher and you can expect to pay higher rates of interest if you’re approved. Monthly repayments on a £180000 BTL mortgage may still work out lower, however, because they are usually set up on an interest only basis.
In terms of affordability, most buy to let lenders base this on the viability of the investment - i.e. whether the projected rental income will cover the mortgage repayments.
If you’re interested in purchasing investment property and want to ensure you have access to the best possible deals in your circumstances, drop us a line today and we’ll put you in touch with one of the trusted BTL mortgage advisors we work with.
Where can I find a 180k mortgage calculator?
Most lenders and some banks as well as personal finance sites will have a mortgage calculator that you can use to estimate your likely repayments on a £180k mortgage. This will only provide a rough estimate of the true costs, however, and we would always advise speaking with an expert who will be better placed to give you a more accurate idea of the cost based on your unique circumstances.
Speak to an expert today!
If you’ve still got some questions about whether you can afford the cost of a £180,000 mortgage, or if you’re ready to move on to the application stage, call Online Mortgage Advisor today on 0800 304 7880 or make ayn enquiry here, and we’ll be happy to put you in touch with one of the all-of-market advisors we work with.
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.
*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.
Lucy has been the backbone of Online Mortgage Advisors' success. Having started out as our tea and coffee expert, Lucy has worked her way through the ranks and is now in charge of our general admin, PR and marketing, and is the crucial link between our customers and the right advice.