Author: Pete Mugleston
Mortgage Advisor, MD
Reviewer: Nathan Porter
Independent Mortgage Advisor
How we reviewed this article:
Our experts continuously monitor changes in the financial space and work closely with qualified mortgage advisors for factual verification.
Repayments on a £450,000 mortgage will vary from person to person, depending on the type of mortgage chosen. The term length influences mortgage repayments; a longer term results in smaller monthly repayments but will lead to a higher total payment by the end of the term.
Interest rates play a crucial role in determining how much you will repay – the higher the rate the more you will pay. The type of mortgage you get can also affect your repayments. For example, with an interest-only mortgage, you’ll only cover the interest charges, not the principal amount borrowed.
In this article, we explore the potential monthly repayments for a £450,000 mortgage, how much you need to earn to secure one, the required deposit amount, and how using a mortgage broker the most competitive interest rate deals.
In this article:
- How much will it cost per month?
- Mortgage Repayment Calculator
- How much do you need to earn to get a £450k mortgage?
- How much deposit do you need for a £450,000 mortgage?
- How to get the mortgage you need
- Example monthly repayments for a £450k mortgage
- Factors that affect your monthly repayments
- Other mortgage costs to consider
- Why use Online Mortgage Advisor?
How much does a £450,000 mortgage cost per month?
As of writing (March 2024), the average monthly repayments on a £450,000 mortgage are £2,631. This is based on interest rates being around 5%, a typical mortgage term of 25 years, and most borrowers opting for a capital repayment mortgage.
Based on these monthly repayments, you would pay £789,197 by the end of your mortgage term.
Speak to one of our expert mortgage brokers for a representative idea of what you might repay. A good broker will take their time to understand your circumstances and get you the best possible deal which could save you money over the term of your mortgage.
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.
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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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Get StartedHow much do you need to earn to get a £450,000 mortgage?
The amount you can borrow is based on your salary. Most lenders will loan around 4 or 4.5 times your annual income. To be approved for a £450,000 mortgage, you’d need an annual income of around £100,000-£112,500.
As the average UK salary is currently £34,900 (March 2024), you’ll need to earn significantly more to be considered for a £450,000 mortgage. Getting a joint mortgage with someone will help your application but the combined earnings will need to be around £100,000 for you to be considered for approval.
Some lenders may also be willing to offer 5 times or possibly even 6 times annual salary. However, this isn’t common and the eligibility criteria are stricter. In these circumstances, it’s best to consult with a broker who can indicate which lenders can offer this and whether you’d likely qualify.
How much deposit do you need for a £450,000 mortgage?
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.
If you were buying a property with a value of £450,000 (rather than borrowing this amount) you’d need a minimum deposit of between £45,000-£55,000, and your mortgage would be between £400,000-£390,000.
It’s not completely out of the question to secure a mortgage for £450,000 with no deposit, but this is extremely rare.
You may need a higher deposit of 25% if you have issues with bad credit or are looking for a mortgage involving a non-standard construction property. It’s important to note, factors such as these two examples will reduce the pool of lenders available.
Most lenders ask for a minimum of 20% for a buy-to-let mortgage, 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 likely you are to qualify 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.
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.
Get StartedFind out the best rate you're eligible for
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How to get a £450,000 mortgage
After making your calculations, the next step in your mortgage application should be to speak to a mortgage broker. They can help you through the process and ensure you get the best possible deal with the lowest repayments. Enquire with us and we will match you with the right advisor for free.
They’ll be able to help with:
- Finding the right lender offering the best rates. Your broker can save you a lot of time and, potentially, some money by identifying the mortgage lenders currently offering the most competitive interest rates across the market.
- Downloading and optimising your credit reports. Before you apply it’s important to check your credit history to make sure no bad credit issues exist and remove any inaccurate or outdated information that could hinder your chances of securing the mortgage you need.
- Preparing your paperwork. Your broker will be able to point out all the relevant documentary evidence required for your mortgage application – proof of income, address and ID, copies of bank statements, etc. – so your mortgage application is as strong as it can be before you submit it.
Example monthly repayments for a £450k mortgage
Below are some examples to give you an idea of what your payments could be for a mortgage this size, and to illustrate how different factors – namely the interest rate and term – can change the monthly cost.
Interest Rate | 2% | 3% | 4% | 5% | 6% |
---|---|---|---|---|---|
5 Years | £7,887 | £8,086 | £8,287 | £8,492 | £8,700 |
10 Years | £4,141 | £4,345 | £4,556 | £4,773 | £4,996 |
15 Years | £2,896 | £3,108 | £3,329 | £3,559 | £3,797 |
20 Years | £2,276 | £2,496 | £2,727 | £2,970 | £3,224 |
25 Years | £1,907 | £2,134 | £2,375 | £2,631 | £2,899 |
30 Years | £1,663 | £1,897 | £2,148 | £2,416 | £2,698 |
Interest-Only | £750 | £1,125 | £1,500 | £1,875 | £2,250 |
For the purpose of the table above we are assuming the interest rate stays the same for the entire length of the mortgage. Interest rates can change if you decide to remortgage on to a different rate or move from a fixed or variable-rate deal to the lender’s standard variable rate (SVR).
With the Bank of England base rate currently at 5.25% (March 2024) and the average mortgage rates between 5%-6% the repayment figures for these columns in the table would be the most realistic at present. However, this will change as and when the base rate falls in the future and mortgage lenders follow suit.
Factors that affect your monthly repayments
Here are some of the key criteria that could have an impact – both directly and indirectly – on your mortgage repayments:
Interest Rates
Qualifying for the lowest interest rates available means your repayments will also be lower.
The general strength of your application and creditworthiness will determine which interest rates you end up with, as it will influence how many mortgage lenders offering the most competitive deals will consider your application.
This is where seeking advice and practical support from a good mortgage broker can make all the difference because their input might result in securing better rates and lowering repayments.
Term Lengths
The duration of your loan will also make a difference to your monthly repayments.
If you take a loan over 20 years, for example – using the same interest rate (5.5%) as above – the monthly cost would be £3,095 whereas for 30 years it would be £2,555.
However, bear in mind, that the overall amount repayable will be greater over longer periods than shorter. Lenders might cap your term length at a certain age, so you might not have a choice.
Mortgage Type
Different types of mortgages will mean different monthly repayment amounts. For example, will you be on a tracker mortgage, which tracks the Bank Of England base rate? In this case, your monthly repayments will fall and rise in line with the base rate’s movements. Or will you want a fixed-rate mortgage, which means you know exactly what your repayments will be for a certain number of years?
You could choose an interest-only mortgage, which means your monthly repayments will be lower but you won’t be paying any capital off during this term, leaving you with the original amount to be repaid at the end of the term using a separate repayment vehicle.
There are also discount mortgages, offset mortgages, and guarantor mortgages, all of which come with unique variables.
Other mortgage costs to consider
Bear in mind that you will have other costs to factor into your mortgage repayments as well as the loan itself and interest, unless you pay these upfront, such as:
- Product fees: certain mortgages come with fees to set them up. This can include a booking fee, an arrangement fee, and a valuation fee. Including these costs onto your total loan can mean nothing to pay upfront, but it will increase how much you pay each month.
- Insurance: you will likely need to consider the additional costs of any insurance you may have to purchase. This can include building insurance, life insurance to cover the mortgage if you die, income protection if you’re unable to work, or critical illness cover to help if you get diagnosed with a serious condition.
- Stamp Duty: depending on your home’s value and if it’s your main residence, you might have to pay stamp duty. If you’re a first-time buyer or if it’s a residential property under £250,000 – this tax won’t apply.
- Legal fees: these costs usually need to be paid during the purchase process. So it won’t affect the monthly payments, but it is an additional cost to factor into your calculations.
You can find more information on all the typical fees and charges that can apply in our dedicated article.
Why use Online Mortgage Advisor?
Working with an experienced advisor from the beginning of your mortgage application can make the whole process feel much more seamless.
Opportunities to lower your monthly repayments and find the most competitive rates on a £450,000 mortgage are far more likely with professional help.
Get in touch today for a free, no-obligation initial consultation to find out more. Call us on 0808 189 2301 or make an enquiry online.
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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