# £500000 mortgages

## What are the monthly repayments on a £500,000 mortgage?

If you’re looking to take out a pretty sizeable £500k home mortgage, you’re probably wondering how much the repayments are going to set you back.

Jump to our calculator journey to establish the costs and which of the best deals you’ll qualify for.

Every day, we receive enquiries from customers asking us questions like “How much is a mortgage on a £500,000 house?” or “How do I get approved for a £500k mortgage?”

This article covers what factors are considered for a loan of this size, and how much £500k mortgage repayments are likely to cost you each month.

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## What monthly repayments can I expect on a £500,000 mortgage?

How much is a mortgage for a £500,000 home?”

Unfortunately there’s no simple answer to this question. When it comes to home loans, how much a mortgage is on a £500k house is dependant on a number of different variables.

All lenders have their own requirements and eligibility criteria which determine what interest rates they offer, and therefore how much a £500,000 mortgage costs you in repayments.

### Interest rate

The two key factors that impact the mortgage payments on a £500k house are interest rate and the length of the term.

This table* demonstrates how mortgage repayments on a £500k home varies based on these two important variables:

 Interest rate 1% 2% 3% 4% 5% 5 year mortgage of £500k £8,547 £8,764 £8,984 £9,208 £9,436 10 year mortgage of £500k £4,380 £4,601 £4,828 £5,062 £5,303 15 year mortgage of £500k £2,992 £3,218 £3,453 £3,698 £3,954 20 year mortgage of £500k £2,299 £2,529 £2,773 £3,030 £3,300 25 year mortgage of £500k £1,884 £2,119 £2,371 £2,639 £2,923 30 year mortgage of £500k £1,608 £1,848 £2,108 £2,387 £2,684 Interest-only mortgage of £500k £417 £834 £1,251 £1,668 £2,085

*This example is for demonstrative purposes only and you should consult your broker or lender for the most up-to-date information and rates.

### Term length

The term length of a £500k mortgage has a huge impact on how much you can pay your lender monthly, as well as the overall amount of interest that is accrued during the term.

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The below table* below shows the impact that reducing a mortgage term for a £500k home loan can have on the amount you will repay.

This example is based on a standard 3% interest rate:

 Monthly repayment Total repaid Total interest paid £500k 30 year mortgage £2,108 £758,887 £258,887 £500k 25 year mortgage £2,371 £711,317 £211,317 £500k 20 year mortgage £2,773 £665,517 £165,517 £500k 15 year mortgage £3,453 £621,523 £121,523 £500k 10 year mortgage £4,828 £579,364 £79,364 £500k 5 year mortgage £8,984 £539,061 £39,061

*This example is for demonstrative purposes only and you should consult your broker or lender for the most up-to-date information and rates.

## What other factors impact the cost of a £500,000 mortgage?

The following variables can also impact on the overall cost of a £500k mortgage…

### Income

“What salary is needed for a £500k mortgage?”

This is another commonly asked question, and it stands to reason that you want to know whether you can afford a £500k mortgage before taking the plunge.

So, what income is needed for a £500k mortgage, and why is your salary a factor?

All providers will have a restriction on how much they are willing to lend, based on your annual income. Most providers cap at 3x – 4x your salary, although some are more generous and will stretch to 5x or even 6x, under the right circumstances.

Affordability is equally important as this gives lenders a more accurate idea of whether you will realistically be able to keep up with your £500k repayments.

Affordability is calculated by looking at your debt-to-income (DTI) ratio, which is measured by your monthly outgoings from your income. The lower your DTI the better, because this means you have more disposable income available.

#### Secured loans and £500,000 mortgages

A secured loan is money you borrow that is secured against an asset you own. Although it’s important to consider the risks involved, if you’re looking to take out a large mortgage some lenders will consider giving you up to 10x your income.

Contact us to find out more on secured loans and whether it’s the best move for you.

### Deposit

Generally, the more deposit you have, the more favourably you will looked at by lenders. Provided you pass the other eligibility checks, the minimum deposit you will be able to put down is 5% of the property value – so 95% loan to value (LTV).

Most residential providers offer up to 85% LTV, some accept 90%, and a handful 95%. The lower your LTV the better, because by investing more of your own money instills more trust in lenders, and therefore potentially more competitive rates for you.

If you’re in the market for a buy to let property, most mortgage lenders will expect you to put down at least 15% deposit.

### Credit history

Mortgage providers are less likely to loan to someone who has has a history of adverse credit as you will likely be  seen as higher risk. However, every provider has different eligibility requirements on what they will accept.

A lot of the time it is dependant on the recency or severity of the issue, although some providers may request a larger deposit, or cap the amount they will lend you.

The most common forms of adverse, ranging from lowest to highest risk, are:

• Low credit score.
• Late payments.
• Mortgage arrears.
• Defaults.
• County Court Judgements (CCJs).
• Debt Management Plans (DMPs).
• Individual Voluntary Arrangements (IVAs).
• Bankruptcy.
• Repossession.

If you’ve experienced any of the above previously, don’t lose hope. You can visit our bad credit mortgage section for more information, or contact us and we’ll refer you to one of the bad credit specialists we work with.

### Age

Older people can find it trickier to get a mortgage as they are deemed higher risk. Some lenders do not lend into retirement at all, others may have a cap on how much they are willing to loan, and others have upper age limits – some won’t lend to anyone over the age of 75, while others will stretch to 85.

However, there are lenders out there who have no age restrictions and are more than happy to lend into retirement – provided your retirement income can cover your £500,000 mortgage payments. Find out more on later life lending here.

### Employment type

Some jobs are seen as higher risk than others. For example, if you’re self-employed many lenders want to see 3+ years’ worth of accounts to prove that you have a steady source of income.

Those with more conventional jobs may be considered lower risk, and therefore receive better rates. Of course, there are other factors considered, such as contract type, length of time in role, and whether your income has been supplemented with bonuses or commission.

If you fall into a more unconventional employment bracket, don’t lose faith. There are lenders out there offering competitive rates. Contact a whole of market broker today for access to the best deals.

### Property type

#### Buy to Let (BTL) properties

If your £500k mortgage is intended for a BTL investment, bear in mind that different rules apply than for residential mortgages.

Some lenders will require a large deposit of at least 25% (although most will be happy with 15%, subject to your other circumstances). Some providers also have minimum income requirements, which tends to be around the £25k mark.

In addition, a borrower’s affordability also takes into consideration the property’s forecast rental income. Many want evidence that the rent will be able to comfortably cover the repayments by at least 125%.

#### Second homes

Many lenders consider you slightly higher risk if you already own a home and want a mortgage for a second property. This is because if you fall into financial difficulty, it is assumed you’ll prioritise repayments on your primary home.

For this reason lenders often require a larger deposit, there may be higher minimum income requirements, and higher scrutiny surrounding your affordability.

#### Non-standard constructions

Some mortgage providers will not lend on properties that fall outside of the conventional construction bracket (e.g. listed buildings, unique properties, buildings with thatched roofs etc), while other lenders consider them higher risk and offer less favourable rates.

However, some lenders are happy to consider such properties and will be able to offer you good, competitive rates. Find out more by visiting our non-standard property section here, or get in touch to speak to an expert advisor.

## Mortgage calculator for a £500,000 home loan

Online calculators only give you a general indication as to whether you’ll be accepted for a mortgage on a £500k house, purely because there as so many variables which can affect your application.

Visit our mortgage repayment calculator, or contact us and we’ll put you in touch with an expert advisor who can advise you on the best deal to suit your circumstances.

## Why you should speak to a whole of market mortgage broker

Online Mortgage Advisor offers a 5-star service with access to expert brokers who are:

• Whole of market.
• Already know the lenders to go to as they successfully arrange these already.
• OMA Accredited advisors.
• LIBF Training course.

## Talk to a whole of market mortgage expert today

If you like what you’re reading or require more information surrounding monthly repayments on a £500,000 mortgage, call Online Mortgage Advisor on 0808 189 2301 or make an enquiry here.

Then sit back and let us do all the hard work in finding the broker with the right expertise for your circumstances. We don’t charge a fee, and there’s no obligation or marks on your credit rating.

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