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Repayments on a £80,000 Mortgage
Find out how much interest rate you need to pay per month on a £80,000 mortgage and how much you can extend your mortgage term.
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Author: Pete Mugleston - Mortgage Advisor, MD
Reviewed By: Jon Nixon - Director of Distribution
In this article, we’ll look at some examples of how much an £80,000 mortgage will cost each month, what influences this, and why using a mortgage broker to find your best deal can save you thousands.
How much does an £80,000 mortgage cost per month?
The monthly repayments on an £80,000 mortgage will differ depending on the deal you are able to secure. But as a broad example, for a standard 25-year repayment mortgage, with a typical interest rate currently (October 2023) of 5.5%, the monthly payments would be £491.
To get a wider idea of how much your monthly repayments might be, enter £80,000 into our mortgage calculator and try adjusting the term length and interest rate to suit your budget.
Mortgage Repayment Calculator
Our mortgage repayment calculator can tell you how much your mortgage will cost you each month and overall. Enter the amount you’re borrowing, the term length and interest rate, and our calculator will do the rest.
Monthly Repayments:
Total amount paid at end of term:
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Factors that could influence your mortgage repayments
The three main elements that determine your monthly payments are:
Interest rate
The lower the interest rate, the lower your monthly repayments will be. The overall strength of your application will dictate how many lenders are prepared to consider you for a mortgage.
Your loan to value (the amount you borrow in relation to the value of the property), employment status, and credit file will all play a part – both directly and indirectly – in how much you pay for your mortgage.
For example, if you have severe bad credit there are specialist lenders who can help you still get a mortgage, but their interest rates are likely to be higher than for someone who’s credit history is clear.
The type of interest rate you choose for your mortgage will also impact your monthly repayment amount:
- Fixed rate: Makes budgeting easier as it is locked in for a fixed period and you know exactly how much your payments will be for that period (usually between two and five years).
- Tracker rate: Typically tracks the Bank of England base rate. Your rate will be a fixed percentage above the base rate and will change as and when the Bank of England adjusts interest rates. Lots of lenders set a minimum and maximum rate so you know the parameters into which your payments will fall for the duration of your fixed term.
Mortgage term
Extending the term of your mortgage beyond the standard 25 years can help keep your monthly repayments manageable. So, for example, a 35-year mortgage at 5.5% will have a lower monthly payment (£430) than a 20-year mortgage at the same rate (£550).
Bear in mind, though, that a longer term results in paying more interest over the duration of your loan. Likewise, reducing the term will result in higher monthly payments but a lower overall cost of borrowing.
Mortgage type
The type of interest rate you choose for your mortgage will also impact your monthly repayment amount:
- Fixed rate: Makes budgeting easier as it is locked in for a fixed period and you know exactly how much your payments will be for that period (usually between two and five years).
- Tracker rate: Typically tracks the Bank of England base rate. Your rate will be a fixed percentage above the base rate and will change as and when the Bank of England adjusts interest rates. Lots of lenders set a minimum and maximum rate so you know the parameters into which your payments will fall for the duration of your fixed term.
Repayment method – Interest-only or Capital and Repayment?
Capital and repayment mortgages are the most traditional method for residential purchases – guaranteeing all the capital is repaid by the end of the term.
With an interest-only mortgage your monthly repayments are lower as they only cover the interest element on your loan.
However, you will need to prove to your lender that you will be able to repay the entire capital amount borrowed at the end of the term. This will involve having an acceptable repayment vehicle in place.
How a broker can help secure the mortgage you need
Once you’ve found a property and made some calculations, your next step should be to find a mortgage broker with experience in arranging mortgages of this amount as this will boost your chances of getting approved at the best terms available.
Using our free broker-matching service you can speak straight away to the right broker by simply making an enquiry online.
They’ll be able to help with:
- Working out how much you can borrow. You may have set your sights on a £80,000 mortgage, but do you definitely know you can borrow that amount? A mortgage broker, using typical lender salary multiplier calculations, will be able to quickly work this out for you.
- Deposit requirements. Your broker will be able to outline what deposit most lenders would require for this size of mortgage.
- Downloading and optimising your credit reports. It’s important to review your credit history before you apply for a mortgage, checking for any inaccuracies or outdated information that can be removed beforehand.
- Finding the right lender and securing the best deal for you. Your mortgage broker will be able to identify those lenders offering the best interest rate terms available across the whole market. This will save you time and, potentially, some money too.
- 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, recent bank statements, personal ID etc.
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Example repayment calculations
Below are some sample calculations that show how the rate and term impact the monthly payments. All payments in this table are based on an £80,000 mortgage.
| 5 Year Term | 10 Year Term | 15 Year Term | 25 Year Term | 35 Year Term | 40 Year Term | Interest-only Mortgage | |
|---|---|---|---|---|---|---|---|
| 2.5% | £1420 | £754 | £533 | £359 | £286 | £263 | £167 |
| 3% | £1437 | £772 | £552 | £379 | £308 | £286 | £200 |
| 3.5% | £1455 | £791 | £572 | £400 | £331 | £310 | £233 |
| 4% | £1473 | £810 | £591 | £422 | £354 | £334 | £267 |
| 4.5% | £1491 | £829 | £612 | £445 | £379 | £346 | £300 |
| 5% | £1510 | £849 | £633 | £468 | £404 | £373 | £333 |
| 5.5% | £1,528 | £868 | £654 | £491 | £430 | £413 | £367 |
| 6% | £1,547 | £888 | £675 | £515 | £456 | £440 | £400 |
For the purpose of this table we are assuming 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 either a fixed or discounted deal on to the lender’s standard variable rate (SVR).
As this table shows, securing a more favourable interest rate can save you a significant amount of money. And extending your term can make monthly payments more affordable, albeit you will pay more interest overall.
With the Bank of England base rate currently at 5.25% (October 2023) and the average mortgage rates between 5%-6% the repayment figures under these columns would be the most realistic at present. However, as the base rate comes back down in the future then mortgage lenders should follow suit and reduce their rates too.
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Other costs to consider
The table below outlines the other main costs and fees involved with arranging a mortgage of this value, which will need money setting aside for, before submitting your application:
| Fee | Cost | How to pay |
|---|---|---|
| Arrangement fee | £0 to £2,000+ | Paid upfront or monthly addition to mortgage repayment |
| Booking fee | £100 to £250 | Paid upfront |
| Valuation survey fee | £0 to £500 | Paid upfront |
| Home buyers report | £400 to £2000+ depending on level of survey | Paid upfront |
| Stamp duty | 0 to 15% of a property’s value depending on what you’re using the property for | Paid upfront |
| Conveyancing fee | £850 to £1500 | Partial payment upfront |
| Broker fee | Depends on mortgage size - could be a percentage of this amount or a fixed-fee | Can discuss with a broker |
| Deposit | Typically at least 5% to 10% of property’s value | Paid upfront |
Get matched with the right mortgage broker
For most borrowers, securing an £80,000 mortgage is a relatively straightforward process. But with so many options, only by consulting an expert can you be sure to get the best deal.
Our broker matching service will make sure you are paired with a broker we work with who has whole of market access and a track record of helping people in your situation get the best deal for their circumstances.
To get matched with your ideal broker, call now on 0808 189 2301 or enquire online to arrange a free, no-obligation chat.
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