Monthly Repayments on a £500,000 Mortgage

Want to find out the monthly payment for a £500,000 mortgage? Calculate your results by entering your details below. Or, you can read more about this topic below.

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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 .

Importantly, the principal amount of £ remains outstanding and must be repaid at the end of the term.

You would need an annual household income of around to afford this mortgage. This is based on 4.5 times your income, the standard calculation used by the majority of mortgage providers.

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Home Mortgage Repayments Monthly Repayments On A £500,000 Mortgage

Author: Pete Mugleston

Mortgage Advisor, MD

Reviewer: Nathan Porter

Independent Mortgage Advisor

Updated: March 18, 2024

How we reviewed this article:

Our experts continuously monitor changes in the financial space and work closely with qualified mortgage advisors for factual verification.

September 29, 2022

Repayments on a £500,000 mortgage will vary depending on your mortgage type. Your mortgage repayments will be determined by the length of your term, interest rate, and the type of mortgage you get.

A longer term will mean smaller monthly repayments but will result in you paying more in the long term. The higher the interest rate, the more you’ll pay and if you get an interest-only mortgage, for example, you’ll only repay the interest on the money you’ve borrowed.

In this article, we’ll look at the monthly repayments you can expect for a £500,000 mortgage, the annual income, and the deposit amount you’ll need to apply for this mortgage. As well as why using an experienced mortgage broker can be a smart way of securing the most favourable terms from across the market.

How much does a £500,000 mortgage cost per month?

At the time of writing (March 2024) the average monthly repayments on a £500,000 mortgage are £2,923. This is based on current interest rates being around 5%, a typical mortgage term of 25 years, and most borrowers opting for a capital repayment mortgage.

Based on the above, you would repay a total of £876,885 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 guide you through the process understanding your personal circumstances and help you get the best possible deal, which could result in lower repayments.

Factors that impact the monthly cost

Here are some critical areas that will help determine the monthly cost of your £500,000 mortgage:

How long you take your mortgage out for will make a noticeable difference to the payments. A longer term often means smaller payments, but you’re likely to end up paying more over the life of the loan. So, to use the example above, a 30-year term with the same interest rate would reduce your payments from £2,923 per month to £2,684.

Other factors

Other eligibility factors can have an indirect impact on your monthly mortgage payments. The following can affect the amount of lenders and deals you qualify for, as well as determine the interest rate you end up with.

The property type you’re planning to buy can also affect your monthly mortgage payment. If the building is a non-standard construction, the number of lenders will be restricted, meaning the rate you have to accept could be higher due to a smaller pool of lenders being available.

How much do you need to earn to get a £500,000 mortgage?

The amount you can borrow is based on your salary. The majority of lenders will loan around 4 or 4.5 times your annual income. To be approved for a £500,000 mortgage, you’d need an annual income of around £111,000-£125,500.

As the average UK annual salary is currently £34,900 (March 2024) that may seem high but if you’re getting a joint mortgage with someone your combined earnings can be used for this calculation.

Some lenders may also be willing to offer 5 times or possibly even 6 times annual salary. 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 £500,000 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.

You’d need a minimum deposit of between £25,000-£50,000 if you were buying a property worth £500,000 (rather than borrowing this amount), which would result in a mortgage between £475,000-£450,000.

It’s not completely out of the question to secure a mortgage for £500,000 with no deposit at all, 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 can 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.

Enter an amount in pound sterling
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Property value minus your deposit/equity
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Loan amount must be less than property value

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.

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How to get a £500,000 mortgage

Once you’ve found a property and made some calculations, the next step in your mortgage application should be to find a mortgage broker with experience in arranging mortgages of this amount. This will boost your chances of getting your mortgage approved at the best terms available.

Using our free broker-matching service you can speak to the right broker by simply enquiring online.

They’ll be able to help with:

  • Working out how much you can borrow: You may have set your sights on a £500,000 mortgage, but can you borrow that amount? A mortgage broker using typical lender salary multiplier calculations can confirm this.
  • Deposit requirements: Your broker will be able to outline what deposit most lenders would require, based on the value of the property you’re looking to buy.
  • Downloading and optimising your credit reports: Before applying, 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.
  • Finding the right lender and securing the best deal for you: 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 available across the market.
  • Gathering all the necessary paperwork required for your application: 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 £500,000 mortgage

Below are some examples to show your potential payments for a mortgage this size, illustrating how different factors can change the monthly cost.

Estimated monthly costs for a repayment mortgage with a 20% deposit:

Interest Rates 3% 4% 5% 6%
5 years £8,984 £9,208 £9,436 £9,666
10 years £4,828 £5,062 £5,303 £5,551
15 years £3,453 £3,698 £3,954 £4,219
20 years £2,773 £3,029 £3,300 £3,582
25 years £2,371 £2,639 £2,923 £3,222
30 years £2,108 £2,387 £2,684 £2,998
35 years £1,924 £2,214 £2,523 £2,851

Monthly mortgage payment for an interest-only £500,000 mortgage:

Interest rates 3% 4% 5% 6%
Any term £1,250 £1,667 £2,083 £2,500

For the purpose of this table, we assume 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 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 for these columns in the table above would be the most realistic at present. However, as and when the base rate is reduced mortgage lenders should follow suit and bring their rates down too.

Additional mortgage costs to consider

There are a few other costs to factor into your total payment calculations when taking out a £500,000 mortgage:

Most mortgages come with fees to pay when setting it up and larger mortgages such as this could result in higher fees. This can include a booking fee, an arrangement fee, and a valuation fee. If you lump these costs onto your mortgage, it can mean nothing to pay upfront, but it will increase how much you pay each month.

Read more about these fees and their potential amounts.

Why use Online Mortgage Advisor?

Finding an experienced broker who has helped numerous clients find affordable £500,000 mortgages can take a lot of research and effort. Luckily, the brokers we work with are industry experts and they can introduce you to the right lender from day one.

We offer a free, broker-matching service. This means we’ll quickly assess your situation, and then pair you up with an expert advisor who’ll find you the best home loan – regardless of the amount – with the lowest repayments.

Just call 0808 189 2301 or make an enquiry. We’ll arrange a free, no-obligation chat between you and your ideal mortgage broker today.

Get an expert to confirm the lowest repayments available to you today

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!

Read more about Pete

Pete Mugleston

Mortgage Advisor, MD

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