£100,000 Mortgage: Monthly Repayments & Income Requirements

In this article, we’ll look at what the monthly repayments for a £100,000 mortgage could be, how much annual income you’ll need for this amount and why using a mortgage broker can help secure the lending you need at the most competitive interest rates.

First, use our calculator below to get an idea of how much a mortgage of this amount could cost each month based on different terms and interest rates.

How much does a £100,000 mortgage cost per month?

If you’d like to get more ideas of your potential monthly repayments, using a range of different interest rate examples, just input the amount you’re looking to borrow into our calculator below (so, in this case £100,000), along with an interest rate and preferred term for your mortgage:

For purely example purposes, a £100,000 mortgage with a 25 year term and a typical interest rate currently (October 2023) of 5.5% would work out at £614 per month.

However, the exact figure will depend on the interest-rate and mortgage term available from the lender you choose to deal with. Small differences in your personal circumstances, or the options a lender offers, could all have an effect – both directly and indirectly – to the monthly repayment cost on a £100k mortgage.

Example monthly repayments for a £100k mortgage

Below are some examples to give you a quick snapshot of what your payments could be for a mortgage this size, and to illustrate how different elements – namely the interest rate and term – can change the monthly cost.

Monthly repayments for an interest-only mortgage:

With an interest-only mortgage, the capital you borrow remains constant, rather than reduce steadily throughout the term as it would with a capital and repayment mortgage, and is repaid in full at the end.

So, the interest rate is the most important factor, because the term length – as you can see from the examples above – doesn’t have any bearing on your monthly payments.

For the purpose of these tables, 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).

How much do you need to earn to get a £100k mortgage?

Mortgage lenders typically cap your borrowing at a multiple of your annual income. Most will lend you 4-4.5 times your income, but some will go as high as 5-5.5 times. So, to get a £100,000 mortgage, you’ll need to earn between £18,000 to £25,000.

The chart below helps to illustrate how this works in more detail.

Bear in mind that, if you’re applying for a joint mortgage with one or more other applicants, lenders will usually look at your combined earnings. There are also limited options available, usually through a broker, for people who need to borrow up to x6 salary.

Affordability calculator

If the chart above doesn’t list your exact income and you’d like to see how much you can potentially borrow, try our affordability calculator below…

How much deposit do you need for a £100,000 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.

So, if you were buying a property with a value of £100,000 (rather than borrowing this amount) you’d need a deposit of between £5,000-£10,000 at least, and then your mortgage would actually be between £95,000-£90,000.

It’s not completely out of the question to secure a mortgage for £100,000 with no deposit at all, but this is extremely rare at the moment.

For a more complex application, where there may be a bad credit issue or a mortgage involving a non-standard construction property, which will reduce the pool of lenders available, you may need a higher deposit of at least 25%.

For a buy-to-let mortgage most lenders ask for a minimum of 20%, 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 likelihood of qualifying 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 £100,000 mortgage

After making your calculations, your next step should be to speak to a mortgage broker to ensure you get the best rate and deal on your mortgage. Make an enquiry 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 too by identifying the mortgage lenders currently offering the most competitive interest rates available 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.

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

The rate you secure will influence the monthly cost. Everything else being the same, a higher interest rate will mean that you pay more for a £100k mortgage on a monthly basis. The rates available on the market can vary quite a bit. So, it’s crucial to deal with a lender who’ll offer the most competitive rate for your circumstances.

Fixed or Tracker

You’ll also get the option to choose between a fixed rate vs tracker mortgage. Usually, a fixed rate will be higher, increasing your monthly repayment. But, locking in a rate can allow you to better plan your finances.

Term Length

How long you take out a mortgage for can affect your rates and will have a direct impact on your monthly cost for a £100k loan. A longer-term will likely reduce your monthly repayments, but it usually means paying more over the life of the mortgage.

Your age

Although it’s possible to get a mortgage at almost any age, time on your side can lead to better deals from lenders. This in turn could mean lower rates and therefore lower monthly repayments for your £100,000 mortgage.

The role your credit score plays

It’s worth downloading all your credit reports before applying for a mortgage because these scores can make a difference to the number of lenders willing to consider your application and, therefore, indirectly affect the rates you’ll be offered. Your broker will be able to help with any mistakes and show you areas to improve. If you do have bad credit, there will still be specialist lenders available.

Other mortgage costs to consider

There are a few other additional charges to think about that may impact the monthly costs when setting up a mortgage worth £100,000:

• Product fees: some mortgages come with fees to set it up. This can include a booking fee, an arrangement fee, and a valuation fee. If you include these costs onto your total loan, it can mean nothing to pay upfront, but it will increase how much you pay each month.
• Insurance: you will likely need to think about 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 the value of the home 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 will 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.

Why use Online Mortgage Advisor?

Finding someone who has plenty of experience securing £100k mortgages with low payments can take a lot of time 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 personal situation and mortgage needs, and then pair you up with an expert broker who’ll find you the best home loan 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.