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By Pete Mugleston | Mortgage Advisor

Pete has been a mortgage advisor for over 10 years, and is regularly cited in both trade and national press.

Updated: 24th August 2020*

In this article, you’ll learn all about £200k mortgages, get a sense of what the mortgage repayments might cost you, and the kind of deposit you may need.

Jump to our calculators to establish repayments from the best deals

Since the expert advisors we work with cover the whole of the market, we’re able to help people, just like you, find the perfect deal for their circumstances.

Here’s what you’ll learn in this article

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What are the repayments on a £200,000 mortgage?

The answer, of course, is not the same for everybody, which is why bespoke advice is crucial.

For a start, every lender is different, along with every borrower’s credit history and circumstances – there are many factors that can affect your monthly repayments.

Two main factors will have a bearing on how much the repayments cost: the term of the mortgage and the interest rate that the lender gives you.

This table shows (approximately) how your monthly repayments can vary, based on the term and the interest rate.

£200,000 Mortgage Repayments
Interest Rate1%2%3%4%5%
5 years£3,418£3506£3594£3683£3775
10 years£1752£1840£1931£2025£2122
15 years£1197£1287£1381£1479£1582
20 years£919£1012£1109£1212£1320
25 years£753£848£948£1055£1170
30 years£643£739£843£954£1074
35 years£564£663£770£885£1010
Interest Only£166£334£500£666£834

The above is for comparative purposes only and you should check with your lender or broker for the most up-to-date information and rates.

By now, you’re probably wondering what interest rate you might be eligible for. This mainly comes down to how large your deposit is, and your risk profile (largely based on your credit history).

If you want a clearer idea of what rate you might get on £200,000 mortgage repayments, get in touch and we’ll match you with an expert advisor who can go over the numbers with you.

How much income do I need to qualify for a £200k mortgage?

As we’ve already touched on, it can come down to more than just the numbers on your wage slip. However, to give you a rough idea, some lenders cap the amount you can borrow based on x4.5 your salary, others go up to x5 and a minority to x6, under the right circumstances.

So, to give a ballpark figure, assuming two applicants, each would need a combined salary of between £33,000 and £50,000, although this does not include other varies lenders take into account when assessing affordability, such as how much deposit you have and your credit rating.

You can read more about affordability assessments here.

How much deposit would I need for a £200k mortgage?

The size of your deposit will depend on your credit rating, employment type, or if you’re after a residential or buy-to-let mortgage, and the lender’s loan-to-value (LTV) ratio.

Loan-to-value is the ratio of mortgage to property value and is expressed as a percentage. For example, if a lender sets their maximum LTV ratio of 90%, you would need a deposit of £20,000 (10%) to get a mortgage for a £200,000 property. You would own that 10% outright.

The more deposit you can put down, the better your rate will typically be as mortgage lenders will see you as a ‘lower risk’. If you have bad credit, are self-employed or after a buy-to-let property, then a mortgage lender may require you to put down a larger deposit to offset the risk.

How does the term of the mortgage affect the repayments and the total amount?

If you’re wondering how long it takes to pay off a £200,000 mortgage, this will come down to how much you can really afford to pay each month.

The table below (based on an interest rate of 3%) shows how reducing the term of your mortgage can affect your monthly repayments and the total amount you’ll pay over the term of the loan.

£200,000 Mortgage Over Different Terms
Monthly RepaymentTotal RepaidInterest Paid
200k mortgage over 30 years£843£303,495£103,495
200k mortgage over 25 years£948£284,478£84,478
200k Mortgage over 20 years£1106£266,169£66,169
200k Mortgage over 15 years£1381£248,583£48,853
200k mortgage over 10 years£1931£231,729£31,729
200k mortgage over 5 years£3594£215,616£15,616

The above example is for demonstrative purposes only and you should consult your broker or lender for the most up-to-date information and rates. 

As you can see, the length of the mortgage has a huge effect on how much you ultimately pay. As an example, a £200 000 mortgage over 25 years could cost you thousands more than a mortgage for 20 years – but you may find the cheaper monthly payments worth the extra cost.

The experts we work with can give you the right advice about which term might be best suited to your circumstances. Make an enquiry to get started.

Does bad credit affect how much deposit I need for a £200,000 mortgage?

Unfortunately yes, though it doesn’t have to be a deal-breaker.

A history of bad credit means that lenders will look upon you as a higher risk. The worse your credit history, the greater the risk, which often means a larger deposit and less favourable rates.

Of course, every lender is different and will treat each issue differently. As a result, each will offer different rates and ask for different deposit sizes.

Some issues are generally seen as lower risk by most lenders. For example, if you have a low credit score and a few late payments on your record, some lenders may be happy to offer you a higher loan-to-value ratio (LTV) and better rate.

But if you have something more serious, such as a recent bankruptcy or repossession, many of them will be much more cautious – requesting a higher deposit or higher rate of interest on your loan.

Other providers adopt a ‘case-by-case’ approach when it comes to lending. You may have to submit a written document regarding the circumstances of your adverse in order for the lender to make a full assessment, and your application may have to go through an additional underwriting evaluation.

See our table below to see how your credit rating could affect your mortgage:

Risk ProfileLTV BandProperty ValueDeposit Required

The above is for demonstrative purposes only and you should consult your broker or lender for the most up-to-date information and rates.

As we said, bad credit doesn’t have to be a deal-breaker. If you’re unsure about your credit history, just speak to one of the advisors that we work with. If you’re looking for a mortgage, despite bad credit – they’re the experts in finding you one.

Can I get a £200,000 buy-to-let mortgage?

It’s very likely. It’s worth bearing in mind that the rules for BTL mortgages are a little different and usually stricter.

For a start, lenders will very often expect a higher deposit – 25% is not uncommon, though some may accept 15%, provided you fit other criteria.

Minimum income requirements are another common factor, with some lenders insisting that you make at least £25k a year.

That said, some lenders will look at rental income forecasts instead, insisting that your projected rental payments cover 125%-130% of the £200,000 mortgage’s monthly payments.

Another hurdle comes from the fact that many of them won’t offer a BTL mortgage to a first-time buyer (you need to own your home first), though some of the more specialist providers may consider this (provided you fit a few other criteria).

Many people opt to take their buy-to-let mortgage on an interest-only basis. The section below will help you get an idea of the monthly payments on a £200k, interest-only mortgage.

Can I get an interest-only £200k mortgage?

Yes, there’s a fair amount of choice on the market, but lenders will want to see a viable ‘repayment strategy’ before stumping up the cash.

A repayment strategy is essentially a written plan that shows how you’ll be able to pay the full balance of the mortgage at the end of the term.

In an interest-only mortgage, your monthly payments only meet the interest on the loan, the capital is due at the end of the term in one large lump sum.

The criteria for an interest-only residential mortgage are little different. You’ll probably be asked for a larger deposit. Most lenders will only offer 75% loan-to-value (LTV), though a smaller number will offer 80%, and a handful will go up to 85% if the circumstances are right.

How much is the monthly interest on a £200,000 mortgage?

Below you can see how a repayment mortgage compares with an interest-only mortgage, based on monthly payments and a term of 25 years.

The lower column illustrates how much monthly interest you would pay on a £200k mortgage at various interest rates.

Interest Rate1%2%3%4%5%
Repayment Mortgage£753£848£948£1055£1170
Interest Only£166£334£500£666£834

For more accurate figures, or if you want to see if a repayment mortgage might be right for you, drop us a line. We’ll connect you with an expert who can help you see if this is the best fit for you.

What else could affect the mortgage application?

There are a number of other factors that lenders will look at when considering you for a mortgage. We’ve listed some of them below.

Your age

Upper age limits are not uncommon. Some lenders won’t lend to anyone over 75. Others set the cap at 85. Some don’t mind how old you are, provided you can provide concrete evidence that you’ll be able to make the payments during retirement.

Your expenses

Under the government’s recent MMR (Mortgage Market Review), your expenses are now scrutinised in as much detail as your income. Which means that a lot of expensive outgoings could decrease your chances of a successful application (even things like gym memberships can be a factor).

The type of property you want to buy

Some lenders are wary of what are referred to properties of ‘non-standard’ construction. Examples include houses with thatched roofs or timber frames. Some will refuse outright to lend on such an unusual house, others will request stricter terms – higher deposits and interest rates, for example.

Your income source(s)

Lenders are most happy with people who work full time, on a large, PAYE salaries. They tend to consider everything else ‘non-standard’ and, as such offer less favourable rates.

That said, there are specialist lenders out there who will consider various income types to approve a mortgage, including the self-employed, or those who make a sizable portion of their income from variables such as bonuses and benefits.

Your credit rating

As we mentioned earlier, your credit is always going to be a factor. The better your rating – the better the deals that are offered to you. As a general rule, the severity of the issue and the amount of time that has elapsed since it occurred are the biggest factors.

For example, a default payment from 5 years ago will have less of an effect than bankruptcy that happened last year.

£200,000 mortgages for the self-employed

Being self-employed is certainly not a barrier to home-ownership, but you may need to look for a specialist lender to get the best rates on a £200,000 mortgage. More conventional lenders often look at self-employed applicants as ‘non-standard’, and thus higher risk.

You can read more about self-employed mortgages here.

Can I get a 200k secured loan?

Secured loans are a practical option for borrowers who want to raise a large sum of money without remortgaging.

Getting a £200k loan secured against your property may, in some instances, turn out to be easier than getting a conventional mortgage. This is because lenders see such loans as lower risk, seeing as they are secured against your property.

Rates for secured loans can be competitive with conventional mortgages as they’re often quicker to arrange and, unlike conventional mortgages, don’t incur any fees for early settlement. Factors such as adverse credit and non-standard income are less of an issue, and some lenders are happy to let you borrow even up to x10 your income on these products.

Where can I find a mortgage calculator?

There’s a huge number of variables when it comes to getting a mortgage – your credit history, income sources, deposit size and monthly outgoings being just a few of them. As such, calculators can only give you the most general idea of what is available.

Getting the expert advice is the best way to find out if you’re eligible for a £200k mortgage, or what repayments on a £200k mortgage might cost you.

Speak to one of the brokers we work with to get the best advice for your unique circumstances – they can help clear up the confusion and connect you with the right lender for you.

Speak to an expert

Wondering if a £200,000 is an affordable option, or simply want some friendly, no-obligation advice?

Call on 0808 189 2301 or make an enquiry and we’ll put you in touch with one of the experts brokers we work with.

Updated: 24th August 2020
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FCA disclaimer

*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.