£100,000 mortgage
When considering taking out a £100,000 mortgage, one of the key things to think about is how much it is going to cost you each month. Depending on the size of your deposit and the amount you borrow, your monthly repayments could vary quite considerably.
Of course, the amount of your deposit and the length of time you borrow for will have a direct impact on your monthly repayments. So if you were to increase your deposit to 20%, your monthly repayments on a 100K mortgage would be lower than if you only put down a 5% deposit.
Similarly, the longer you borrow for, the more interest you will pay over the life of the mortgage but the cheaper it will be each month.
To give you an idea of how much a £100,000 mortgage might cost each month, we’ve put together some examples below.
As a guide only, the tables below provide an indication of monthly repayments.
Interest only mortgage per month
| 100K Interest Only Mortgage | ||||
|---|---|---|---|---|
| 2% | 3% | 4% | 5% | |
| 10 years | £166 | £250 | £333 | £416 |
| 15 years | £166 | £250 | £333 | £416 |
| 20 years | £166 | £250 | £333 | £416 |
| 25 years | £166 | £250 | £333 | £416 |
The above figures only include the mortgage interest, there is no provision for repayment of the capital sum borrowed.
Repayment mortgage per month
| 100K Repayment Mortgage | ||||
|---|---|---|---|---|
| 2% | 3% | 4% | 5% | |
| 10 years | £920 | £965 | £1012 | £1060 |
| 15 years | £643 | £690 | £739 | £790 |
| 20 years | £505 | £554 | £605 | £659 |
| 25 years | £423 | £474 | £527 | £584 |
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 cost of a £100,000 mortgage will vary according to three main factors:
Interest rate
The interest rate you pay on your 100K mortgage will have a big impact on how much your monthly repayments are. The higher the interest rate, the more you will have to pay each month.
If you are on a variable rate mortgage, your monthly payments could go up or down depending on changes to the interest rate. If you are on a fixed rate mortgage, your monthly payments will stay the same for a set period of time, even if the general interest rates go up or down during this time.
What does APRC mean and why does it matter?
Term
The term of your mortgage is the length of time you have to repay the money you have borrowed. The longer the term, the lower your monthly repayments will be, but you will pay more interest overall.
The average mortgage term in the UK is 25 years. However, you can choose to borrow for a shorter or longer period of time if you wish, depending on the lender.
Should you get a 30 year mortgage term?
Repayment method
There are two main types of mortgage repayment methods – interest only and repayment. With an interest only mortgage, you only pay the interest on the money you have borrowed each month. You don’t reduce the amount you owe until the end of the mortgage term when you will need to find a lump sum to repay the capital.
With a £100,000 repayment mortgage, you pay back both the interest and some of the capital each month. This means that your monthly repayments are higher than with an interest only mortgage, but you will gradually reduce the amount you owe over the term of the mortgage.
Your choice of repayment method will have a major impact on your monthly repayments for a 100K mortgage. Interest only mortgages tend to have lower monthly payments than repayment mortgages, but you will need to find a lump sum at the end of the mortgage term to repay the capital.
Can you get an interest only mortgage?
An interest only mortgage is normally offered by most lenders. However, they will be keen to understand how you intend to pay back the mortgage before approving this request.
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 as this makes the repayments more affordable.
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
What is APRC?
APRC stands for Annual Percentage Rate of Charge. It is a standard interest rate calculation designed to reflect the total amount of interest that will be paid over the entire period of the loan.
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.
Why do I need a broker?
A mortgage broker’s job is to save you time by searching for the most appropriate mortgage and to then liaise with the lender until the mortgage is approved.
What deposit do I need?
This all depends on the value of the property. But a deposit of £5,000-£10,000 may allow you to purchase a property for around £100,000.
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.
How do I apply?
We recommend that you first talk to an experienced mortgage broker who will be able to confirm the cost of a mortgage and then help you to apply.
