£800,000 mortgage
How much does a mortgage of £800K cost each month and what factors can affect the cost?
£800,000 is a considerable sum to borrow as a mortgage and some lenders would class this as a large loan. It therefore makes sense to consider all the options and get expert mortgage advice before making any decisions.
Your loan to value, or LTV ratio is the size of your mortgage in relation to the value of your property. It will usually be expressed as a percentage. So, for example, if you’re borrowing £800,000 to buy a property worth £950,000, your LTV would be 84%.
The lower your LTV, the less risk you pose to a lender and the more likely you are to be offered a lower interest rate. To lower the LTV you need to increase the amount of deposit.
What are your financial commitments?
Your 800k mortgage monthly repayments will be just one of your many financial commitments. You’ll also need to consider things like council tax, utility bills and insurances, the lender will also look carefully at any regular expenditure.
As a guide only, the tables below provide an indication of monthly repayments.
Interest only 800000 mortgage per month
| 800K Interest Only Mortgage | ||||
|---|---|---|---|---|
| 2% | 3% | 4% | 5% | |
| 10 years | £1333 | £2000 | £2667 | £3333 |
| 15 years | £1333 | £2000 | £2667 | £3333 |
| 20 years | £1333 | £2000 | £2667 | £3333 |
| 25 years | £1333 | £2000 | £2667 | £3333 |
The above figures only include the mortgage interest, there is no provision for repayment of the capital sum borrowed.
Repayment 800000 mortgage per month
| 800K Repayment Mortgage | ||||
|---|---|---|---|---|
| 2% | 3% | 4% | 5% | |
| 10 years | £7361 | £7724 | £8099 | £8484 |
| 15 years | £5148 | £5524 | £5917 | £6326 |
| 20 years | £4047 | £4436 | £4847 | £5279 |
| 25 years | £3390 | £3793 | £4222 | £4676 |
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?
There are a number of things that will affect the monthly mortgage repayments you’ll need to make on an £800,000 mortgage.
Here’s a few key considerations:
– The interest rate: this is probably the biggest factor affecting your monthly payments. The lower the interest rate, the lower your payments will be. Interest rates can change over time, so it’s important to consider what might happen if rates rise in the future.
– The term of the mortgage: the longer the term, the more interest you’ll pay overall but the lower your monthly payments will be which helps with affordability.
– The type of mortgage: there are different types of mortgages available, each with its own advantages and disadvantages. For example, fixed rate mortgages guarantee your payments for a set period of time, while variable rate mortgages may start with lower payments but could rise in the future.
– Your personal circumstances: things like your employment type, income, outgoings and credit history will all affect the mortgage deal you’re offered.
Getting expert mortgage advice
It’s important to get expert mortgage advice before applying for any mortgage but especially for a large loan. A qualified mortgage adviser can help you understand all your options and find the best deal for your individual circumstances.
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 30-35 years at the beginning of their house buying journey, to make the mortgage 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
How do I get the best deal?
By using an independent mortgage broker you will have access to thousands of different schemes and interest rates.
What is Large Loan?
Opinions do differ but mortgages in excess of £1 million can be considered ‘large’ and often require a specialist lender.
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.
I am self-employed?
Different employment types can affect the available lenders but more and more people are now self-employed with variable incomes.
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 and save you loads of time.
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.
