How Do Repayments On £150K Mortgage Work?

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Before anybody takes out a mortgage of any kind, the most important thing you should consider is the monthly repayments on the mortgage. That’s because this is the most important consideration to mortgage lenders too.

You’ll only be accepted for the £150,000 mortgage if everybody involved is confident in your ability to repay the loan by affording the monthly repayments.

Today’s guide will focus on what a typical £150,000 mortgage repayment plan might look like based on different factors such as interest rates, how much deposit you can put down, interest only mortgage vs capital and interest mortgage (or repayment mortgage, as they’re also known – where you make payments covering both the interest rates and the actual value of your property), your mortgage term and mortgage deal, and other factors.

*All figures marked with ~ throughout the article are accurate estimates, although final repayment amounts won’t always be the same if you apply for a similar deal due to changing interest rates and mortgage deals.

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What Factors Determine My Affordability?

Before we look at some more detailed example calculations, let’s first look at the different factors that mortgage lenders will consider when assessing your affordability.

The main two factors are, of course, your incomings and your outgoings. This tells the lender how much you typically spend and earn in a month, so they can determine if you have the available income to afford the monthly payments associated with the £150,000 mortgage you’ve applied for.

Another key factor that individuals new to mortgages don’t realise is that your finances will also be subject to a stress test.

Essentially, mortgage lenders look at your affordability in different circumstances. This could be considering what would happen in the event of a dual income application dropping down to a single income, or if you had children, etc.

Whilst you won’t be rejected outright if they determine you wouldn’t be able to afford your repayment mortgage should your circumstances change, lenders will consider the possibility of you switching to an interest only mortgage during this time to ensure you could afford that instead.

Can I Still Get A £150,000 Mortgage With Bad Credit History?

Yes – but you’ll likely need the help of a specialist mortgage broker that works with different lenders than you would usually find on the high street, for example.

Some lenders specialise in supporting individuals with a poor credit history in getting on the property ladder. This may come at additional costs in terms of the deals on offer often carrying higher monthly repayments, but it is still possible.

At When The Bank Says No, we’re expert mortgage brokers capable of finding a range of people, with a range of unique circumstances and credit histories that may otherwise be ineligible for traditional mortgages, lending options that work for them.

If you’re looking for a mortgage broker with excellent mortgage broker fees who specialise in securing mortgage deals for individuals with more nuanced circumstances, then work with us today.

What Affects The Monthly Repayments On A £150,000 Mortgage?

The main factors affecting how high or low your monthly repayments will be are:

  • Interest Rate
  • Term
  • Mortgage Type

How Your Interest Rate Affects Repayments

Depending on the type of interest mortgage deal you choose, interest rates may be variable according to your mortgage deal, meaning as they fluctuate in the UK, so too will the interest rates on your mortgage, and you’ll have higher monthly repayments or lower monthly repayments as a result.

For the vast majority of people, they’ll be on fixed rate mortgages, which means they lock into a certain interest rate for an initial rate period – usually 2, 3, 5, or 10 years.

Each month you’ll repay your capital (what you’ve borrowed) and your interest rate, so getting a good deal on your interest rates is important.

How The Length Of Your Mortgage Term Affects Repayments

Another factor that may affect repayments is your repayment period. Monthly payment will be determined based on the length of your mortgage term too.

The shorter your mortgage deal in terms of its length, the higher your monthly repayments will be, but the lower total interest you’ll pay.

The longer your mortgage, the lower your monthly repayments will be, but you’ll pay more in interest in total by the end of the deal.

For example:

  • A £150,000 Mortgage over 30 years with a 4.5% interest rate = ~£760 per month (for a total repayment including interest of £273,486)
  • A £150,000 Mortgage over 5 years with a 4.5% interest rate = ~£2796 per month (for a total repayment including interest of £167,772)

As you can see, if you can afford higher repayments over a shorter period you’ll pay less in total, but for many this simply isn’t feasible. 

You’ll need to play around with different term lengths to strike the right balance between monthly payments you can afford, and trying to keep your total repayment costs, including interest, to an acceptable level for you.

How Mortgage Type Affects Repayments

Although everybody will initially sign up to a repayment mortgage (meaning both your capital and interest will be paid off each month) you might face a situation where you need to switch mortgage type part way through your mortgage deal.

This is usually not a problem if there are extraneous variables that have caused the change such as being made redundant.

Here you may have to switch to an interest only mortgage, meaning you aren’t paying anything towards the capital you borrowed, but instead simply covering the cost of the interest.

This will, of course, lead to much lower mortgage repayments in the short term, but you will be delaying your repayment time frame at the same time, so you will need to seriously consider the best course of action for you, should a switch in mortgage type prove necessary during your mortgage term.


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How Do Deposits Affect Repayments?

A huge part of getting approved for a mortgage is having a suitable deposit amount. And how large your deposit is will determine your monthly repayments – HOWEVER, it’s important to note that when discussing a £150,000 mortgage today, we’re talking about the amount you borrow, not the property value.

Let us make it clearer:

  • A £150,000 mortgage means you have borrowed £150,000 from your mortgage lender. The property value will be greater than this, and your deposit will cover the rest. For example, if the property you’re applying for is worth £200,000 and you’re applying for a mortgage worth £150,000, then you will need a deposit of £50,000.
  • If the property is valued at £150,000, then you will still need to put down an initial deposit. Say you put down a deposit of £25,000, then your mortgage would be worth £125,000, not £150,000.

The deposit you put against your property will impact your loan to value (LTV) ratio. In the example above, where the property is worth £200,000, a deposit of £50,000 is given, and the mortgage amount is worth £150,000 – you have an LTV ratio of 75%.

Whilst your loan to value (LTV) ratio doesn’t affect mortgage repayments after you’ve taken out the mortgage, it will affect what mortgage amount you will need to take out to cover the value of your property, which will, of course, affect how much you pay back, making your repayments higher or lower as a result.

How To Calculate Repayments On 150k Mortgage

Calculating repayments on a mortgage is relatively straightforward with modern technology. You can find a mortgage affordability calculator very quickly online, and it will give you a very accurate estimate of the sort of repayments you can expect to make.

There’s a complicated formula you could also use to work out these repayments yourself, but the risk of making a mistake is too great. An online calculator will tell you everything you need to know in seconds.

All you’ll need to enter into a mortgage repayments calculator is typically:

  • Mortgage Amount
  • Mortgage Term
  • Mortgage Type (Interest Only vs Repayment)
  • Interest Rate
  • Any Mortgage Fees

Armed with this information, you can get a good idea about how much you will likely pay.

Repayment Mortgage Worked Examples

Below we’ll take a look at accurate estimates of the likely monthly repayments you’ll need to make on a £150,000 repayment mortgage (including capital and interest) based on mortgage term length and various interest rates.

Likely Monthly Payments On A £150,000 Repayment Mortgage (All Figures Given Are Accurate Estimates Only ~)
Interest Rates
Length Of Mortgage Term 2.5% 3.5% 4.5% 5.5%
5 Years £2662 £2729 £2796 £2865
10 Years £1414 £1484 £1554 £1628
15 Years £1000 £1073 £1147 £1226
20 Years £795 £870 £949 £1032
25 Years £673 £751 £833 £921
30 Years £593 £674 £760 £852

Interest Only Mortgage Worked Examples

With interest only mortgages, you’ll pay the same amount of interest each month regardless of the length of your mortgage deal. Your monthly repayment interest total will remain the same on an interest only mortgage because the term length doesn’t affect the amount you pay back each month in interest. 

The length of the deal only affects the capital repayment because of how quickly or slowly you can get the £150,000 borrowed repaid, meaning you’ll pay more or less each month depending on the time frame you have to repay it.

Likely Monthly Payments On A £150,000 Interest Only Mortgage (All Figures Given Are Accurate Estimates Only ~)
Interest Rates
Length Of Mortgage Term 2.5% 3.5% 4.5% 5.5%
5/10/15/20/25/30 Years £313 £438 £562 £687

So, How Much Is A 150K Mortgage Per Month In The UK?

Because interest rates fluctuate and different people lock into different deals with different lenders at different times, there is no straightforward answer to this. The above guide should give you a better idea about the amount you might pay per month on a £150,000 mortgage, but this should be taken as a guide only because your deal will almost certainly look different.

With that said, by using our guide you’ll be able to get a better idea about the sort of monthly mortgage payments you can expect to pay to cover your loan capital and interest, or interest only should your circumstances change once you’ve had your mortgage approved.

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How Can Working With A Mortgage Broker Help?

Specialist Mortgage Broker Services

At When The Bank Says No, we’re specialist mortgage brokers capable of helping individuals who may otherwise struggle to get approved for a £150,000 mortgage. By working with unique lenders and finding you the best possible deals, it’s possible to still get approved for a mortgage even in the following circumstances:

If your circumstances mean you could struggle to find mortgage approval through traditional means, then we can help.

Regular Mortgage Broker Services

It’s also worth noting that even if you don’t require specialist support from mortgage brokers like us, a mortgage broker is still one of the best ways to get the best mortgage deal for you.

You should consider working with a mortgage broker regardless of your circumstances, as you’ll have access to better deals, benefit from their expertise and understanding of the industry, and be better able to match your mortgage to your circumstances to ensure affordability and a repayment structure that truly works for you.

Repayments On 150K Mortgage Summary

Hopefully our guide today has given you a greater understanding of the sort of repayments you could expect to make each month on a £150,000 mortgage.

One of the best ways to get an accurate estimate is by using a mortgage affordability calculator closer to the time of your application, as circumstances change frequently in the mortgage sector and the monthly payments you were quoted last week could look very different today.

Our guide should, however, give you a better idea about the sort of mortgage length and interest rate deals that might suit you best, so you at least have a strong starting point.

And if you require help from a specialist mortgage broker, why not reach out to our team at When The Bank Says No today?

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Emma Jones
Emma Jones
Emma began her career in Lloyds Banking Group, first in the unsecured & secured loans department at Halifax and later as a mortgage advisor at Lloyds. During 9 years in these roles and a further 2 years at Yorkshire Building Society, Emma was able to observe the impact of the recession, and how the banks let their customers down by denying loans and mortgages. Wanting to be a driving force for change, she stepped into a market advice role where she has been able to help clients when others couldn’t. Identifying a gap in the mortgage space, Emma went on to establish When the Bank Says No. As a keen property investor, she has been the focus of features in publications including The Sunday Times and This is Money. Emma’s greatest joy is overcoming the low expectations of their customers, many of whom have all but given up on getting a mortgage due. One thing Emma has learned through her own personal struggles is every client must be treated like a human and understood better by advisors and lenders in the industry. “We all have to navigate life events which can ultimately impact your financial status. It shouldn’t mean dreams of homeownership or business growth should have the breaks applied”. Emma and her team’s passion for helping people overcome the challenges they may face when applying for a mortgage have fuelled the success of When the Bank Says No.