£400,000 mortgage
Let’s look at how much a £400K mortgage repayment might cost you, the sort of deposit you’ll need, and how to get a great deal.
Mortgages of this size are more common than you might think. The first thing to consider is how much you can afford to repay each month. This will depend on your income and outgoings, as well as any other debts you have. It’s important to be realistic, as you don’t want to end up in financial difficulty.
Don’t just focus on the mortgage repayments, your other monthly commitments need to be taken into account as well. This includes things like food, utility bills, council tax and travel costs.
But, to give you an idea of what to expect, we thought we’d show you some quick numbers on monthly repayments and the size of deposit you might need. Of course, this is all dependent on a number of factors like your income, outgoings, and credit score – but it should give you a good starting point.
As a guide only, the tables below provide an indication of monthly repayments.
Interest only mortgage per month
| 400K Interest Only Mortgage | ||||
|---|---|---|---|---|
| 2% | 3% | 4% | 5% | |
| 10 years | £667 | £1000 | £1333 | £1667 |
| 15 years | £667 | £1000 | £1333 | £1667 |
| 20 years | £667 | £1000 | £1333 | £1667 |
| 25 years | £667 | £1000 | £1333 | £1667 |
The above figures only include the mortgage interest, there is no provision for repayment of the capital sum borrowed.
Repayment mortgage per month
| 400K Repayment Mortgage | ||||
|---|---|---|---|---|
| 2% | 3% | 4% | 5% | |
| 10 years | £3680 | £3862 | £4049 | £4242 |
| 15 years | £2574 | £2762 | £2958 | £3163 |
| 20 years | £2023 | £2218 | £2423 | £2639 |
| 25 years | £1695 | £1896 | £2111 | £2338 |
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 400K mortgage will vary according to a few different factors:
The main factor that will affect how much your monthly repayments are is the interest rate you’re offered. This is because the higher the interest rate, the more you’ll have to pay each month. The other thing that can have an impact is the term of your mortgage. A longer term will mean lower monthly payments, but you’ll end up paying more in interest overall.
Of course the amount you borrow will also affect your monthly repayments. The bigger the mortgage, the more you’ll have to pay each month. The amount of your deposit plays an important role in this too. The bigger the deposit, the less you’ll need to borrow and the lower your monthly payments will be.
Your monthly mortgage payment is also influenced by the type of mortgage product you choose. For example, an interest-only mortgage will have lower repayments than a repayment mortgage, but at the end of the term you’ll still owe the full amount of the loan.
Other costs, such as mortgage life insurance, can also add to your monthly payments. It’s important to factor these in when you’re considering how much you can afford to repay each month.
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.
Our guide to interest only mortgages
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. If the mortgage is due to run beyond age 65, then you will be classed as borrowing into retirement.
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 LTV calculator.
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.
How much Stamp Duty will I pay?
The amount of Stamp Duty payable will be confirmed by your Solicitor. You may find our Stamp Duty calculator handy to give you a rough idea.
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.
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 work with the lender until the mortgage is approved.
