£500,000 mortgage
We receive numerous enquiries from customers asking us questions like “what are the monthly repayments on a £500,000 mortgage?” and “how much will I need to earn to get a mortgage for £500,000?”.
Typically, £500,000 mortgage loans are only available to people who earn a high income and have significant savings for the deposit. If you’re looking to take out a large mortgage of this size, you’ll need to be prepared to provide proof of your income and assets, as well as a detailed explanation of your financial history.
The amount you’ll need to repay each month will depend on the interest rate charged by your lender, the length of your loan term, and whether you opt for a repayment or interest-only mortgage.
To give you an idea of how much you could expect to pay back each month, we’ve put together some example monthly repayments for a £500k mortgage at different interest rates and loan terms in the tables below.
As a guide only, the tables below provide an indication of monthly repayments.
Interest only mortgage per month
| 500K Interest Only Mortgage | ||||
|---|---|---|---|---|
| 2% | 3% | 4% | 5% | |
| 10 years | £833 | £1250 | £1667 | £2083 |
| 15 years | £833 | £1250 | £1667 | £2083 |
| 20 years | £833 | £1250 | £1667 | £2083 |
| 25 years | £833 | £1250 | £1667 | £2083 |
The above figures only include the mortgage interest, there is no provision for repayment of the capital sum borrowed.
Repayment mortgage per month
| 500K Repayment Mortgage | ||||
|---|---|---|---|---|
| 2% | 3% | 4% | 5% | |
| 10 years | £4600 | £4828 | £5062 | £5303 |
| 15 years | £3217 | £3452 | £3698 | £3953 |
| 20 years | £2529 | £2772 | £3029 | £3299 |
| 25 years | £2119 | £2371 | £2639 | £2922 |
The above figures include both capital and interest combined into one monthly payment.
CONTACT A MORTGAGE BROKER
If you are ready to take the next step then we can put you in touch with a fully qualified independent mortgage broker.
What affects the monthly payment figure?
The monthly payment on a £500,000 mortgage will be affected by the following factors:
- The interest rate charged by your lender
- The length of your loan term
- Your choice of repayment method
What is the APRC?
The APRC (annual percentage rate of charge) is the total cost of your mortgage, including all fees and charges, expressed as a yearly interest rate.
If you’re comparing mortgage deals, it’s important to look at the APRC rather than just the interest rate, as this will give you a more accurate picture of the overall cost of the loan.
What does APRC mean and why does it matter?
Can you get an interest only mortgage?
An interest only mortgage is normally offered by most lenders but they will be keen to understand how you intend to pay back the mortgage before approving this request.
Our guide to interest only mortgages
Can I change my mortgage to interest only?
How much does an average mortgage cost?
It’s impossible to put a single figure on this as the monthly cost will be affected by the type of house and its location. To learn more about average mortgage repayments in the UK, you might like to read this article.
What’s the best mortgage term?
The best mortgage term is the one that fits your situation. Most people opt for a term of 25-30 years at the beginning of their house buying journey, although there is a trend towards marathon mortgages, which have terms of 35-40 years. If you’re already in a mortgage you could ask the lender to extend the term.
How do I make my monthly payments cheaper?
Making the following changes to your mortgage will reduce the monthly payments:
- REDUCE THE MORTGAGE AMOUNT – A little obvious but by borrowing less your monthly payments will be less.
- EXTEND THE MORTGAGE TERM – A repayment mortgage will be cheaper over 30 years compared to 25 years.
- CHEAPER INTEREST RATE – By getting a better deal on your interest rate will enable your payments to reduce.
- CHANGE TO AN INTEREST ONLY MORTGAGE – This will make your payments considerably cheaper. However, you will not be repaying the mortgage anymore.
You should seek advice from a mortgage broker before making any of these changes.
FAQ
Frequently Asked Questions
Are these figures accurate?
Yes the figures are accurate. However, before considering a mortgage you should always obtain a mortgage quotation from your mortgage broker.
What does LTV mean?
LTV is loan to value. It is the ratio, expressed as a percentage, of your mortgage when compared to the property value. Check out our Loan to Value calculator.
Do you have an online calculator?
Yes we have quite a few helpful online mortgage calculators to help people work out the cost of a mortgage and moving home.
Will I have to prove my income?
Yes, lenders need to ensure that any mortgage is affordable so they will want to see proof of your income, and possibly expenditure as well.
Is it worth paying for a mortgage broker?
In most cases, yes. A broker is a mortgage expert. So they can find the best deal from all of those available plus save you loads of time and hassle.
What is a key facts illustration?
When a mortgage adviser recommends a mortgage, they must give you a key facts illustration (KFI) document before you apply. This is a mortgage quotation which details the costs and fees for the mortgage.
