£700,000 Mortgage: Monthly Repayments & Income Requirements

Calculate your monthly repayments on a £700,000 mortgage and find out how to secure the best deal

Home Mortgage Repayments £700,000 Mortgage: Monthly Repayments & Income Requirements
Pete Mugleston

Author: Pete Mugleston

Mortgage Advisor, MD

Updated: June 3, 2024

Repayments on a £700,000 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.

Extending the term of your loan will reduce your monthly payments but will increase the total amount you pay over time. A higher interest rate means you will pay more in interest charges, and with an interest-only mortgage, you only pay the interest, not the principal amount borrowed.

In this article, you’ll discover how much the monthly repayments could be on a £700,000 mortgage, the annual income, and the deposit amount you’ll need to apply for this mortgage. You’ll also learn about other factors that might affect how much you pay and why you should speak to a mortgage broker before committing to any interest-rate deal.

How much does a £700,000 mortgage cost per month?

At the time of writing (June 2024) the average monthly repayments on a £700,000 mortgage are £4,092. This is based on current 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 £1,227,639 over the 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.

It’s a good idea to speak to one of the advisors we work with to better understand what your repayments might look like. They can assist you in obtaining more favourable terms and lower repayments compared to what you might secure on your own when trying to get a mortgage.

Mortgage Repayment Calculator

This calculator can tell you the monthly and overall cost of your mortgage, based on the loan amount, interest rate, and term length.

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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

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How much do you need to earn to get a £700,000 mortgage?

What you can borrow is based on your salary. Most lenders will loan 4 or 4.5 times your annual income. You’ll need an annual income of £160,000 to £180,000 to be approved for a £700,000 mortgage. This is significantly above the average UK annual salary, currently £34,900 (June 2024).

If your income doesn’t meet the required amount, you may not be approved for a £700k mortgage. However, you can apply for a joint mortgage with your partner to increase your chances of approval. By combining your earnings, you can improve your chances of meeting the income requirements for the mortgage.

Some lenders may be willing to offer 5 times or possibly even 6 times your annual salary. In this scenario, you would need to earn £140,000 to be eligible for a £700,000 mortgage. However, this option is often only available to certain professions, such as doctors or lawyers, with high or stable incomes.

It’s best to consult a broker if this scenario affects you, as they can indicate which lenders can offer this and whether you’d meet the lender’s affordability criteria.

The table below shows how your income and the provider’s income multiples combine to show your maximum borrowing capacity:

Income 4x income 4.5x income 5x income 5.5x income 6x income
£150,000 £600,000 £675,000 £750,000 £825,000 £900,000
£160,000 £640,000 £720,000 £800,000 £880,000 £960,000
£170,000 £680,000 £765,000 £850,000 £935,000 £1,020,000
£180,000 £720,000 £810,000 £900,000 £990,000 £1,080,000
£190,000 £760,000 £855,000 £950,000 £1,045,000 £1,140,000

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:

Mortgage Affordability Calculator

Use this calculator to determine how much you could potentially borrow for a mortgage, based on the typical salary multiples used by most UK lenders.

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Your Results:

You could borrow up to 

Most lenders would consider letting you borrow

This is based on 4.5 times your household income, the standard calculation used by the majority of mortgage providers. To borrow more than this, you will need to use a mortgage broker to access specialist lenders.

Some lenders would consider letting you borrow

This is based on 5 times your household income, a salary multiple you might struggle to qualify for without the help of a broker. This income multiple is not widely available to customers who are applying directly with a lender.

A minority of lenders would consider letting you borrow

This is based on 6 times your household income, a salary multiple you will struggle to get without a broker. Six-times salary mortgages are usually only available under very specific circumstances.

Get Started with an expert broker to find out exactly how much you could borrow.

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How much deposit do you need for a £700,000 mortgage?

Most lenders’ minimum deposit requirements range from 5% to 10% of the property value. For a property valued at £700,000, you’d need a minimum deposit of £35,000 to £70,000.

You may need a larger deposit, around 25% if you have bad credit. A larger deposit is also necessary for a mortgage on a non-standard construction property, such as a thatched country cottage.

For buy-to-let mortgages, most lenders typically require a minimum deposit of 20%. However, an experienced mortgage broker in this field may be able to identify lenders who ask for less.

Having a larger deposit increases your chances of getting approved for a mortgage. It also lowers your monthly payments, improves your loan-to-value ratio, and allows you to access more competitive interest rates. A smaller deposit will result in higher monthly payments.

Use our calculator below to see how this plays out.

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.

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Property value minus your deposit/equity
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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 £700,000 mortgage

Once you’ve found a property and performed the necessary calculations, your next step should be to seek out an experienced mortgage broker. Doing so will increase your chances of approval and help you secure the best available terms.

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

They’ll be able to help with:

  • Deposit requirements: You’ll need to save a minimum deposit of 5% to 10% to secure a £700,000 mortgage. The exact amount will depend on the property value, but for a £700,000 house, a 10% deposit would be £70,000. One simple way to save for this deposit is to open a savings account and deposit 10% to 15% of your monthly wage into the account.
  • Reviewing and Optimising Your Credit Reports: Reviewing your credit history before applying for a mortgage is one of the most important things you can do. This involves checking for inaccuracies or outdated information that can be removed beforehand.
  • Gathering all the necessary paperwork required for your application: Your broker will be able to guide you through the application process and all the documents you might need – proof of income, at least three months of bank statements, personal ID, proof of address, evidence of deposit, latest P60 form etc.
  • Determining Your Borrowing Capacity: Based on typical lender salary multiplier calculations, you might assume that £700,000 is the maximum amount you can borrow for a mortgage. However, this may 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.
  • Identify the Right Lender and Secure the Best Deal: Your mortgage broker can identify lenders offering the best interest rate terms. This can save you time and potentially some money.
  • Helping you through the Mortgage Process: It can be daunting to apply for a mortgage, 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 £700,000 mortgage

The table below shows how monthly payments on a £700,000 mortgage can change depending on the rate and term.

Interest rate 15 years 20 years 25 years 30 years 35 years
1% £4,189 £3,219 £2,638 £2,251 £1,976
2% £4,505 £3,541 £2,967 £2,587 £2,319
3% £4,834 £3,882 £3,319 £2,951 £2,694
4% £5,178 £4,242 £3,695 £3,342 £3,099
5% £5,536 £4,620 £4,092 £3,758 £3,533
6% £5,907 £5,015 £4,510 £4,197 £3,991
7% £6,292 £5,427 £4,947 £4,657 £4,472
8% £6,690 £5,855 £5,403 £5,136 £4,972

The repayment amount for interest-only mortgages stays the same regardless of the loan term. For instance, if the monthly repayment at a 6% interest rate is £3,500, it will remain unchanged whether you choose a 15-year term or a 30-year term. This is because the principal amount does not decrease and is settled in full at the end using a separate repayment vehicle.

Interest rate 1% 2% 3% 4% 5% 6% 7% 8%
Any term £583 £1,167 £1,750 £2,333 £2,917 £3,500 £4,083 £4,667

For the purpose of these tables, 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% (June 2024) and the average mortgage rates between 5% to 6% the repayment figures along these rows in the table above would be the most realistic at present. This can change as and when the base rate is changed.

Factors that affect monthly repayments

Each of the following factors outlined below directly impacts your mortgage repayments.

Interest rate

Securing the best (lowest) interest rate available will ensure that your repayments are as low as possible, based on the current market conditions when you apply.

The strength of your application and the size of your deposit will determine how many mortgage lenders are willing to consider you for a mortgage. As a result, this means you’ll have access to the best available rates.

Other factors, such as your credit history, age, and employment status, can also impact the interest rate you qualify for, as this could result in a smaller pool of lenders willing to consider you for a mortgage.

Mortgage term

Not every mortgage is set for a 25-year term. If you can demonstrate affordability isn’t an issue, you can often shorten your term. This means your monthly payments will be higher, but you will save on interest over the term of your loan. Some lenders may permit overpayments, which can help you pay off your mortgage more quickly and reduce the total interest you pay.

However, you need to be careful not to overpay too much as you might face early repayment charges if you repay more than 10% each year.

If you are finding it difficult to afford a £700,000 loan for the home you want, you can extend your loan term to a maximum of 40 years to make your monthly payments more manageable. However, not all lenders offer 40-year terms, and you are more likely to be approved for one if you are younger.

Suppose you don’t match the eligibility criteria for high street lenders. In that case, you may still get a good rate by approaching a specialist lender more sympathetic to your situation. This can include applicants looking for bad credit mortgages or mortgages for self-employed people. The best way to find these lenders is by using the services of an experienced mortgage broker.

Mortgage Type

How you choose to pay back your mortgage is also a factor that can affect your monthly repayments.

Broadly speaking there are three different types available:

  • Fixed-rate mortgages: These types of mortgages make budgeting easier as you tie in a fixed rate for a fixed term so you know exactly what your monthly payments will be for several years (usually between two and five).
  • Variable rate mortgages: As the name suggests, these types of mortgages have rates that can vary rather than remain fixed. As such they can be slightly more risky than a fixed-rate mortgage but can result in lower monthly repayments during the term. Types of variable rates include tracker mortgages (see below), discounted rate mortgages and standard variable rate (SVR) mortgages.
  • Tracker mortgages: This type of mortgage has a variable rate that usually tracks the Bank of England base rate (typically a set percentage above the base rate). Some lenders include a minimum and maximum rate to give you peace of mind. Rates are usually lower than fixed rates on offer at the time of taking out your mortgage. Many lenders offer discount tracker rates to help reduce your monthly payments.

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, intended for over 55s.

Your credit history

If you have blemishes on your credit history, this might result in your lender charging you a higher interest rate to mitigate the risk of lending to you. A broker specialising in mortgages for people with bad credit can help you find the best rates given your circumstances.

If you’re unsure what your credit score is or want to check before you go any further, use the free tool below:

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Other costs to consider

When setting up a mortgage worth £700,000, it’s important to consider additional charges that may impact the monthly costs. Speaking to a mortgage broker about the following costs will provide more information about what they entail and help avoid unpleasant surprises.

Product fees

Some mortgages come with fees to set them up, such as some of the ones listed below:

  • Arrangement fee: Most mortgages include an arrangement fee, also known as a “product fee.” These fees typically depend on the complexity of the application and can range from up to around £2,000. In some cases, these fees can be added to your mortgage, but doing so will increase your monthly payment slightly and result in paying interest on the fee.
  • Booking fee: Not every mortgage will require a booking fee, but those that do will typically ask for around £100 – £200.
  • Valuation fee: Most lenders insist on a valuation fee to confirm the purchase price is right and protect their investment. This is likely to cost you in the region of £300.
  • Land registry fee: You pay an admin fee to the Land Registry to change the register entry to your name for properties valued at £100,001 and above. The fee varies from £45 to £145 depending on the property’s value.
  • Solicitors fee: Also known as the ‘conveyancing fee’, this is the amount you pay your solicitor for their work on the deal. These can vary considerably but as a general guide, expect to pay between £800 and £1,500.
  • Broker fee: If you decide to use their services a broker will typically charge either a percentage of the amount borrowed (usually up to 1%) or a fixed fee (between £500-£1,000 depending on the complexity of the application).

Insurance

When considering a mortgage, you’ll likely need to account for additional insurance costs. These may include:

  • Home insurance: Covers your property against damage or loss.
  • Life insurance: Provides coverage for the mortgage in case of your death.
  • Income protection: Helps if you’re unable to work due to illness or injury.
  • Critical illness cover: Assists if you’re diagnosed with a serious medical condition

Stamp duty

Depending on the value of the property and whether it’s your main residence, you may have to pay stamp duty. First-time buyers and those purchasing residential properties under £250,000 are exempt from this tax.

These costs usually occur during the purchasing process, and while they do not directly impact monthly payments, they are an additional expense to consider in your calculations.

Why use Online Mortgage Advisor?

When taking out a £700,000 mortgage, finding the right broker is crucial.

Our broker-matching service removes the burden of finding the right specialist and introduces you to one with a proven track record of helping people in your situation get the best mortgage deal.

When you enquire, we’ll take some basic details and then pair you with the ideal broker according to your circumstances and those of the property you are looking to buy or remortgage.

To get matched with your ideal broker, call today on 0808 189 2301 or enquire online to arrange a free, no-obligation chat.

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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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