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What are the Repayments on a £450,000 Mortgage

What the repayments on a 400k mortgage are and how to establish if you're eligible for one

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By Lucy James  | Content Editor

Updated: 26th June 2019 *

What are the monthly repayments on a £450,000 mortgage?

If you’re looking to take out a mortgage, it stands to reason that you’re going to want to know how much the repayments will are going to be. Every day we receive enquiries from customers who want to know much a mortgage of a certain size is going to set them back each month.

Using £450,000 mortgages as an example, this article is going to explains how different interest rates and term lengths impact how much you will have to pay for a mortgage on a £450k house, and what other factors lenders take into consideration when authorising a mortgage of this size.

The topics we’re covering are:

  • How much can I expect £450k mortgage repayments to cost?
  • Interest rate
  • Term length
  • Other factors that might impact how much you pay on a mortgage for a £450k house?
  • Property types
  • £450k mortgage calculator
  • Speak to a whole-of-market mortgage expert

How much can I expect repayments on a £450k mortgage to be?

So, how much is a mortgage on a £450k house? There is no simple “one figure” answer to this; how much you pay is heavily dependant on a number of factors.

All lenders are have different eligibility requirements and your individual circumstances (discussed in more detail later) will have a bearing on what interest rate you’re offered, and therefore how much the monthly payments are, and what the overall cost of a £450k mortgage is.

Interest rate

Interest rate and length of the term are some of the the most significant factors impacting how much your monthly payments on a £450,000 mortgage will cost you.

The below table* illustrates how £450k mortgage payments varies based on changes to these two key variables:

Interest rate 1% 2% 3% 4% 5%
5 year £450k mortgage £7,692 £7,887 £8,086 £8,287 £8,492
10 year £450k mortgage £3,492 £4,141 £4,345 £4,556 £4,773
15 year £450k mortgage £2,693 £2,896 £3,108 £3,329 £3,559
20 year £450k mortgage £2,070 £2,276 £2,496 £2,727 £2,970
25 year £450k mortgage £1,696 £1,907 £2,134 £2,375 £2,631
30 year £450k mortgage £1,447 £1,663 £1,897 £2,148 £2,416
Interest-only £450k mortgage £375 £750 £1,125 £1,500 £1,875

*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.

Length of mortgage term

How long your mortgage term runs for has a considerable impact on how much a mortgage costs you, not only based on monthly repayments, but the overall cost of interest at the end of the period.

This table* helps illustrate just how much reducing your term length can affect your monthly mortgage payments, and overall interest paid.

The below is based on a mortgage of £450k at a standard interest rate of 3.5%:

Monthly repayment Total repaid Total interest paid
£450k 30 year mortgage £2,021 £727,452 £277,452
£450k 25 year mortgage £2,253 £675,842 £225,842
£450k 20 year mortgage £2,610 £626,356 £176,356
£450k 15 year mortgage £3,217 £579,055 £129,055
£450k 10 year mortgage £4,450 £533,984 £83,984
£450k 5 year mortgage £8,186 £491,177 £41,177

*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.

In this scenario, the cost of a £450k mortgage over a 15 year term length instead of 30 saves you a whopping £148,397!

What other factors impact how much a mortgage for £450,000 costs?

Income

Income is important to lenders because it gives a good indication as to whether your salary can justify a £450,000 mortgage.

Mortgage providers measure affordability by calculating your debt-to-income (DTI) ratio, which looks at your monthly income minus your outgoings. The lower your DTI, the better, because it means you have fewer financial commitments and therefore more money available to repay a mortgage.

The majority of lenders will have a restriction on how much they lend you for a mortgage, based on your annual salary. Most providers cap loans at 3 - 4x your income, although some will stretch to 5x. A handful may even extend to 6x your earnings.

If you’re looking to use a secured loan as collateral for a mortgage, lenders can be even more generous. They will often consider loaning 10x your income, some even more. Lenders also tend to be more flexible when it comes to your other circumstances if you’re using a secured loan, as you have more invested.

Loan to Value (LTV)

A property’s loan to value (how much you want to borrow in relation to its market value) can impact how favourably lenders look at you. For example, if you put down a 25% deposit on a home, you may receive more competitive interest rates than if you’d put down 5%.

Most residential mortgage providers offer up to 85% loan to value (LTV), whereas others will extend to 90%. A few accept 95% LTV (5% deposit).

If you want to know how a higher deposit could impact your mortgage application, contact us to speak to an expert advisor - there are various schemes out there providing help with a deposit, which could save you a lot of money in the long term.

Credit history

Mortgage providers tend to be more dubious about lending to someone with bad credit history as they are a riskier investment.

Those that will consider you may have certain requirements or restrictions in place - for example, higher interest rates, minimum income requirements, or a cap on how much they are willing to loan.

However, each has their own criteria as to what is and isn’t acceptable, and often this is based on how recent the instance occurred and / or the severity of the issue. The most common forms of adverse (lowest to highest risk) include:

  • Low credit score.
  • Late payments.
  • Mortgage arrears.
  • Defaults.
  • County Court Judgements (CCJs).
  • Debt Management Plans (DMPs).
  • Individual Voluntary Arrangements (IVAs).
  • Bankruptcy.
  • Repossession.

If you have a history of adverse and want to know how this could impact your £450k mortgage application visit our bad credit page for more information, or contact us to speak to a bad credit expert.

Age

Older borrowers can find it harder to get approved for a mortgage due to being higher risk, especially for long-term loans.

Some providers won’t lend into retirement, but the majority have minimum term lengths, or a maximum age they will lend up to. Many refuse to lend to those over 75, whereas others cap at 80 / 85.

However, not everyone has an age restriction. As a whole of market broker, we have access to over 100 mortgage providers, and scour the market to find you the most competitive £400k interest rates. Visit our later life lending page for more information.

Employment type

If you’re self-employed or fall into another unconventional employment bracket you may been deemed higher risk to potential lenders, which could therefore impact the interest rates you are offered.

If you’re self-employed, providers will usually want to see a minimum of one year’s worth of accounts (most want 3+ years’, others require 2), so as to ensure that your income is steady and you can afford the £450k mortgage repayments.

Lenders can also be cautious of those who supplement their earnings with bonuses or commission, and contract type and length of time in a role is another influencing factor.

However, there are plenty specialist lenders who specialise in providing home loans to those who have an unconventional employment type - it’s just knowing where to look. Contact us to speak to an expert in the field.

Property type

Buy to Let (BTL) properties

Different rules apply when it comes to BTL properties, so if your £450k mortgage is for an investment of this type, keep in mind the following:

Most lenders require a larger deposit, usually 25%+ (75% LTV).
Some lenders have minimum income requirements (around £25k is standard).
Affordability is assessed based on forecast rental income as well as the borrower’s annual salary.
To find out more, click here to visit our dedicated BTL mortgage section.

Second homes

Existing homeowners pose more of a risk because if you take out a mortgage on a second home and fall into financial difficulty for whatever reason, lenders will expect your first priority to be your main place of residence. Borrowers will also have to prove they have the means to finance two mortgages at once.

If you’re looking to take out a £450k mortgage on a second home you may be required to put down a larger deposit for a second mortgage. There may also be minimum income requirements, and more in-depth affordability assessments.

Non-standard construction types

Any property that deviates from the standard “house built from brick and/or block walls” is classed as a non-standard construction.

These types of property are seen as a less stable investment, which usually means fewer willing lenders and less competitive rates for the buyer.

However, there are lenders that are happy to consider unconventional property types. Find out more by visiting our non-standard property section.

Should I use a calculator?

Because there are so many variables when it comes to getting a mortgage, you’re best off speaking to a whole of market broker who can provide you with the most reliable, up to date advice to suit your needs.

Contact us and we’ll put you in touch with one of the experts we work with. However, if you’d like a rough idea on your eligibility for a £450,000 mortgage, you can check out our mortgage repayment calculator.

Why you should speak to a whole of market mortgage broker

OMA offers a 5-star service with access to expert brokers who are:

  • Whole of market.
  • Already know the lenders to go to as they successfully arrange these already.
  • OMA Accredited advisors.
  • LIBF Training course.

Talk to a whole of market mortgage expert today

If you like what you’re reading or require more information surrounding your £450,000 mortgage, call Online Mortgage Advisor on 0808 189 2301 or make an enquiry here.

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 no obligation or marks on your credit rating.

Updated: 26th June 2019
OnlineMortgageAdvisor 2019 ©

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.