Repayments on a £450,000 Mortgage

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.

How much does a £450,000 mortgage cost per month?

As of writing (April 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 opting for a capital repayment mortgage. Based on this, you would repay £789,197 by the end of your mortgage term.

However, if you secure a mortgage with a longer term, this will result in smaller monthly repayments but you’ll pay more in total over the term of the mortgage.

Speak to one of the advisors we work with 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.

How 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. This is significantly above the average UK salary, currently £34,900 (April 2024).

Getting a joint mortgage with your partner, for example, will help your application. However, 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 stricter eligibility criteria are often only available to certain professions, such as a doctor or lawyer, with high or stable income.

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.

The above table is for comparative purposes only. Talk to one of the advisors we work with for the most up-to-date information on affordability criteria.

If you’d like to see how this works out for yourself, based on your annual income, take a look at our mortgage affordability calculator below:

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.

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:

• Deposit requirements: You’ll need to save a minimum deposit of 5% to 10% for a £450,000 mortgage. How much this figure will be depends on the value of the property, but a 10% deposit on a £450,000 house would be £45,000. A simple way to help you save money is to set up a savings account and put a percentage of your monthly wage, around 10 to 15%, into the account each month.
• 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.
• 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, at least three months of bank statements, personal ID, proof of address, evidence of deposit, latest P60 form etc.
• 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.
• Working out how much you can borrow. You might assume that £450,000 is the maximum you can borrow for a mortgage based on typical lender salary multiplier calculations. However, this might not be the case. A mortgage broker can assess your circumstances and eligibility for better deals from lenders, potentially allowing you to borrow more at better interest rates.
• Navigating the Mortgage Process: Applying for a mortgage can be challenging, especially if it’s your first application. The right mortgage broker can assist you with any issues you may encounter along the way, safeguard your interests, and provide support if anything goes wrong.

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.

For interest-only mortgages, the repayment remains as is regardless of the term. So, for example, the repayment shown for 6% – £2,250 per month – would be the same if you opted for a 15-year term or a 30-year term as the capital owed doesn’t reduce and is paid off in full at the end using a separate repayment vehicle.

See how this works in the table below:

For the purpose of these tables, we assume 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% (April 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 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.

Your age

Most lenders, especially on the high street, impose a maximum age limit on their mortgage products, meaning you’ll typically need to have finished repaying your mortgage by the age of 75-85.

The older you are, the shorter the term is likely to be. However, not all lenders apply maximum age limits, so if you’re an older borrower, you might be able to achieve the term you want with the right lender. Alternatively, you can look at equity release products, which are intended for over 55s.

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.