Repayments on a £20,000 Mortgage

Find out what the monthly repayments could be on a £20,000 mortgage and what factors can influence this amount.

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Pete Mugleston

Author: Pete Mugleston

Mortgage Advisor, MD

Nathan Porter

Reviewer: Nathan Porter

Independent Mortgage Advisor

Updated: December 7, 2023

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

If you’re looking for a £20,000 mortgage and want to know how much your monthly repayments could be, use our calculator below to get an idea based on different terms and interest rates.

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Mortgage Repayment Calculator

Our mortgage repayment calculator can tell you how much your mortgage will cost you each month and overall. Enter the amount you’re borrowing, the term length and interest rate, and our calculator will do the rest.

Enter the amount you're borrowing
Enter the mortgage rate, 5.5% is a typical rate currently but this can vary
Enter the mortgage term, 25 years is the average but lenders can offer shorter and longer terms

Monthly Repayments:

Total amount paid at end of term:

Get started with an expert broker to find out how much they could help you save on your mortgage repayments.

Read on to find out more about all the different factors that can determine your mortgage repayments and how speaking with an experienced mortgage broker is a smart way of accessing the best possible terms available across the market.

How much does a £20,000 mortgage cost per month?

Based on a standard repayment mortgage with a typical interest rate currently of 5.5% and a term length of 25 years, you should expect to pay £123 per month.

However, your mortgage repayments can vary depending on the following key factors:

  • Mortgage term: The longer the term, the lower the repayments would be, but it’s worth thinking about how long you want such a small loan amount for as longer terms mean you’ll pay more interest overall.
  • Interest rate: Higher interest rates will naturally mean higher repayments. Typically, the best rates are reserved for mortgages with a lower loan-to-value (LTV). anything on or below 60% LTV should qualify for the most competitive mortgage rates.
  • Mortgage type: Whether you opt for a fixed or tracker rate mortgage will also have a bearing on the amount leaving your account each month. Trackers can vary in line with the Bank Of England base rate, whereas a fixed-rate may be slightly higher but gives a guarantee that the payment remains the same.

Another option to consider, should you wish to keep repayments at a minimum, is an interest-only mortgage. This would mean only paying the interest each month and paying the loan back in full at the end of the term.

To qualify for this mortgage type, you’d need to show a lender you’ll have access to £20,000 as a lump sum at the end of the term. A broker would be able to advise on what an acceptable repayment vehicle might be.

How to get a £20,000 mortgage

Your first step should be to find an experienced mortgage broker as this will boost your chances of getting approved at the best terms available.

Using our free broker-matching service you can speak straight away 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 think £20,000 is the maximum you can borrow for a mortgage but that might not be the case. A mortgage broker, using typical lender salary multiplier calculations, will be able to quickly work this out for you.
  • Deposit requirements. Your broker will be able to outline what deposit most lenders would require for this size of mortgage.
  • 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 ID etc.

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Example calculations

The below table highlights some estimated repayment amounts for a £20,000 mortgage based on differing term lengths and interest rates.

Interest rate 3% 4% 5% 6%
5 years £359 £368 £377 £387
10 years £193 £202 £212 £222
15 years £138 £148 £158 £169
20 years £111 £121 £132 £143
25 years £95 £106 £117 £129
30 years £84 £95 £107 £120
35 years £77 £89 £101 £114

If you decide to go down the interest-only route, these are some repayment amounts you could expect to pay until the end of the term. Note that the amount will remain the same no matter how long a mortgage term you opt for.

Interest-only 3% 4% 5% 6%
£50 £67 £83 £100

*For the purpose of these tables 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 on to a different rate or move from either a fixed or discounted deal on 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 in the table above 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.

Other costs to consider

Keeping repayments to a manageable amount is paramount when there are so many other mortgage fees that come with purchasing a home and taking out a mortgage, even when it’s considered a smaller one.

Additional fees for a mortgage can include:

  • Arrangement fee: Sometimes called a ‘product fee’, most mortgages include one. This can usually be paid upfront or added to your loan and is likely to be between £0 and £2,000.
  • Booking fee: This is typically between £100 and £200. Not all providers charge this and a broker will make sure it is a consideration when working out your best deal.
  • Valuation fee: This is different from your survey. It is instructed by the lender as they need to confirm the property value before approving a deal. This is usually around £300.
  • Survey: Depending on the type of survey you opt for, it can cost anywhere between around £400 and £1,500.
  • Stamp duty: This is a tax you pay to the government and is based on the price you pay for the property. Properties bought for less than £250,000 are not subject to stamp duty.
  • 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 so may not be relevant if you are only borrowing £20,000.
  • Solicitors fee: Also known as the ‘conveyancing fee’, this is the amount you pay your solicitor for their work on the deal. These can vary considerably but as a general guide, expect to pay somewhere between £800 and £1,500.
  • Broker fees: If you decide to use their services a broker will typically charge either a percentage of the amount borrowed (usually up to 1%) or a fixed-fee (between £500-£1,000 depending on the complexity of the application).

Some of these costs will need to be paid in full during the purchasing process whilst others can be paid monthly alongside the mortgage repayments. There are also some fees certain lenders will waive and a broker would know which ones to apply to for such a bonus.

Note that a deposit would usually be factored in as an additional cost but for a mortgage this size, a deposit is often not required.

Get matched with a broker specialising in smaller mortgages

If you’re asking yourself how much a £20,000 mortgage will cost, there’s no point working with a high net worth broker, or even one who manages mortgages around £100,000. You need expert guidance specifically on smaller mortgages and that means connecting with one of the many experts in our database.

They’ll be able to take stock of your finances, provide advice on where to apply for the cheapest loan, and capitalise on existing relationships with high street and exclusive lenders to get you a home loan that suits your budget.

Reach out today via our online form or by calling 0808 189 2301 to be matched to the right mortgage broker for your needs.

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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