How much does a mortgage of £250,000 cost each month and what factors can affect the amount you need to pay?
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£250,000 mortgage
The average mortgage for first time borrowers in the UK is £234,722 and £383,386 in Greater London, but what are the average monthly repayments for a mortgage of this size? And what about other amounts?
We take a look at the monthly repayments and explore different ways to make your monthly payments more affordable. So whether you’re considering purchasing a new home or are just curious about mortgages in general, keep reading!
Assuming an interest rate of 3%, the monthly repayments on a £250,000 mortgage would be approximately £1,185. This is based on a repayment term of 25 years.
When you are ready to start looking for a mortgage, it is important to compare deals from a range of lenders to find the best one for you. The interest rate is not the only thing to consider – other factors such as fees, the size of the deposit required and whether the mortgage is fixed or variable can all make a difference to the overall cost.
As a guide only, the tables below provide an indication of monthly repayments.
Interest only mortgage per month
| 250K Interest Only Mortgage | ||||||
|---|---|---|---|---|---|---|
| 2% | 3% | 4% | 5% | 6% | 7% | |
| 10 years | £417 | £625 | £833 | £1041 | £1250 | £1458 |
| 15 years | £417 | £625 | £833 | £1041 | £1250 | £1458 |
| 20 years | £417 | £625 | £833 | £1041 | £1250 | £1458 |
| 25 years | £417 | £625 | £833 | £1041 | £1250 | £1458 |
| 30 years | £417 | £625 | £833 | £1041 | £1250 | £1458 |
The above figures only include the mortgage interest, there is no provision for repayment of the capital sum borrowed.
Repayment mortgage per month
| 250K Repayment Mortgage | ||||||
|---|---|---|---|---|---|---|
| 2% | 3% | 4% | 5% | 6% | 7% | |
| 10 years | £2300 | £2414 | £2531 | £2651 | £2775 | £2902 |
| 15 years | £1608 | £1726 | £1849 | £1976 | £2109 | £2247 |
| 20 years | £1264 | £1386 | £1514 | £1649 | £1791 | £1938 |
| 25 years | £1059 | £1185 | £1319 | £1461 | £1610 | £1766 |
| 30 years | £924 | £1054 | £1193 | £1342 | £1498 | £1663 |
The above figures include both capital and interest combined into one monthly payment.
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If you are ready to take the next step then we can put you in touch with a fully qualified independent mortgage broker.
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MORTGAGE CALCULATOR
You may find our online mortgage calculator useful for helping to calculate a more accurate mortgage repayment using different terms and interest rates.
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What affects the monthly payment figure?
The monthly cost of a 250K mortgage will vary depending on the interest rate, repayment term and fees charged by the lender.
The interest rate is the biggest factor affecting the size of your monthly repayments. A small difference in the interest rate can make a big difference to the amount you pay each month, so it’s important to compare deals before you apply.
The repayment term is the length of time you have to repay the mortgage. The shorter the term, the higher the monthly payments will be, but you’ll pay less interest overall.
The mortgage fees charged by the lender can also add to the cost of your mortgage. Some lenders charge arrangement fees, which can be several hundred pounds. It’s important to factor these in when you’re comparing deals to make sure you’re getting the most competitive deal.
What other factors should you consider when taking out a mortgage?
As well as the monthly repayments, there are other things to think about when you’re taking out a mortgage.
The deposit is the amount of money you put towards the purchase price of your property. The larger the deposit, the lower the risk for the lender and the lower the interest rate they might be able to offer you. Using a high deposit will reduce your LTV and may give you access to cheaper deals.
Mortgage products can be either fixed or variable rate. A fixed rate product means that your interest rate will stay the same for a set period of time, usually two, three or five years. This gives you certainty about your monthly payments during that time. After the fixed period ends, the rate will usually revert to the lender’s standard variable rate.
A variable rate mortgage means that your interest rate can go up or down during the term of the mortgage. This makes your monthly payments less predictable, but you may benefit if interest rates fall.
When you’re considering taking out a mortgage, it’s important to compare deals from a range of lenders and to think about all the costs involved, not just the monthly repayments. By doing this you can make sure you find the best deal for your individual circ*mstances.
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. Repayment mortgages are the most popular choice by far.
A 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. With houses becoming increasing expensive, lots of buyers are looking at ‘marathon‘ mortgage terms of 35-40 years.
How much does the average mortgage cost?
If you’re thinking about buying a home or changing your current one, it’s helpful to know how much you might be paying each month on your mortgage. Our guide offers a straightforward look at the average mortgage repayments in the UK, considering different types of homes and where they are.
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.
Another option could be to bring someone else into the mortgage with you. With a joint mortgage you would both be owners and could share the mortgage payment costs.
You should seek advice from a mortgage broker before considering any of these changes.
Applying For A Mortgage
How to get mortgage ready
Mortgage Repayments Guide
How much can I borrow
FAQ
Frequently Asked Questions
What is a first time buyer?
To qualify as afirst time buyeryou cannot have previously ever owned any residential property. Even if this was some years ago and you have now sold the property, you will not qualify.
How do I apply?
We recommend that you first talk to anexperienced mortgage brokerwho will be able to confirm the cost of a mortgage and then help you to apply.
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.
What are mortgage fees?
You may be asked to pay: valuation fee, arrangement fee, booking fee, broker fee. Your mortgage adviser will be able to confirm how much these are.
I want to borrow a different amount?
For more specific mortgage amounts we recommend using ouronline mortgage calculator.
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.
How much do you need to earn for a £250,000 mortgage?
For a £250,000 mortgage, you would need to earn around £62,500 gross per year.We explore the factors that affect mortgage affordability and give you tips for improving your chances of getting a 250K mortgage.
read more
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