Monthly repayments on a £350,000 mortgage will depend largely on the deals available when you apply for mortgages with different mortgage lenders. Some will have better mortgage products than others, and you might want to consider working with a mortgage broker like us at When The Bank Says No to access even better deals.
Your monthly mortgage repayments on a £350,000 mortgage will depend on the exact nature of the mortgage deal, including mortgage interest rates, the loan term, the mortgage amount, your deposit, and the mortgage type.
Below we’ll talk you through all these factors so you can understand exactly how they affect the repayments on your £350,000 mortgage. We’ll also work through some examples so you get a better understanding of what your monthly payments might look like.
*All figures marked with ~ throughout the article are estimates, although actual repayment amounts will vary depending on changing interest rates and mortgage deals even if you apply for the same loan amount.
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How To Get Approved For A £350,000 Mortgage
£350,000 is not a small mortgage, so you’ll need to be confident that the monthly repayments are something you can realistically afford on your sole or combined earnings. Look for a deal that means you pay back your mortgage quickly to avoid high interest rate charges, but one that is also affordable on a monthly basis. Try to be realistic here, too. You could face early repayment charges if you’re initially overcautious and then find you can pay back your mortgage quicker than initially anticipated.
To get approved, you’ll need an appropriate deal and mortgage lenders will determine your suitability based on two key factors:
- your annual income and your outgoings – your outgoings are what you spend
- what would happen if your personal circumstances were to change
Income and Outgoings
The first thing mortgage lenders will look at to assess your eligibility for a mortgage deal is your outgoings and earnings. This gives them an accurate idea about your spending habits and whether or not you can realistically afford your mortgage repayments.
Most lenders will primarily be interested in your income and outgoings over the 3 months immediately preceding your application, but some may be interested in a longer period if they think you’re a higher risk borrower.
Any mortgage advisor will tell you that you should compare mortgage repayments for a variety of deals to ensure you have the income to cover the costs each month. If you’re sure, then the chances are the lenders will be confident of your ability to pay back the loan, too.
Stress Test
Another key factor that determines if you can afford the monthly repayments for a 350K mortgage is the lender’s financial stress test. Here, they’ll consider your ability to make your usual mortgage payments if things should change for you and your household.
Usually this entails factors like:
- your household growing
- your income changes
- your dual income household becoming a single income household
By looking at your application from a worst case scenario, lenders can determine how high or low risk you are as a borrower. They may be able to offer better deals if they think your risk is lower, and for you this means lower monthly repayments due to a better mortgage rate.
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Getting Approved With A Poor Credit Rating
If your credit history is less than ideal, you don’t have to worry. You can still access specialist lenders who will consider your mortgage application, but in order to do so you’ll need to work with expert mortgage brokers.
At When The Bank Says No, we offer our service to a range of people whose circumstances may mean they’ll struggle to be approved for a mortgage from traditional lenders due to their credit history. We can help you secure great mortgage deals despite poor credit.
What Impacts My Monthly Mortgage Payments?
The four main factors that will directly impact how high or low your monthly payments will be for your mortgage are:
- the interest rate
- the mortgage term
- the mortgage type
- how much deposit you can put down
Interest Rates
The interest rate deal you can secure on your mortgage is one of the biggest influences on your payment each month, because over a longer mortgage term (20 years plus) you’ll probably spend more in total interest paid than the value of the initial loan as an overall cost. A low interest rate will mean lower monthly payments.
If you opt for fixed rate mortgages then you’ll lock into an interest rate for a certain period of time, usually for an initial rate period of 2, 3, 5, or 10 years depending on the deal you sign up for. Otherwise, you’ll be on your lender’s standard variable rate mortgage or tracker mortgage, meaning as the base rate in England for interest rates changes, so will your monthly payments.
There are pros and cons of both types of mortgage. The main thing is that you find a deal with interest rates you can afford to keep up with.
Mortgage Term
The longer the term of your mortgage, the lower your monthly repayments will be but the higher the overall cost of your loan. The shorter your repayment period, the higher your monthly repayments will be but the lower the overall cost.
Here’s an example of the monthly repayment on £350k mortgage with a 4.5% interest rate over 10 and 30 years respectively:
- Repayments each month over 10 years: ~£3,627 (total repayment – £435,204)
- Repayments each month over 30 years: ~£1,773 (total repayment – £638,139)
Your total interest cost will be much higher on a £350,000 mortgage when you take out a longer loan, but you will benefit from lower payments each month.
The perfect mortgage deal for you is the one that means you don’t pay too much in interest over the term of the loan, but one that also allows you to comfortably afford the payment each month.
Mortgage Type
There are two main mortgage types: a capital repayment mortgage and interest only mortgages.
With a repayment mortgage, your monthly repayments will be higher because you’re repaying the interest and capital of the loan at the same time, so you’ll actually be paying back what you borrowed. The remaining balance reduces year on year.
An interest only mortgage means you only cover the interest costs on the loan each month, and you won’t actually be paying back the capital sum you borrowed. This essentially means you’re extending the loan term, so you’ll end up paying more interest over time if you opt for this mortgage type.
You’ll usually only be able to switch onto an interest only mortgage if your circumstances have changed and you can no longer afford to pay your monthly mortgage costs. You can revert back to your normal mortgage as and when your financial position improves.
Deposit Amount
Mortgage deals get better the higher your deposit because, in simple terms, you present less risk to a lender. A lower loan to value ratio means you can access a better mortgage deal.
Looking for a £350,000 mortgage means you’ve probably already put down a large deposit, but if you can contribute any more to bring down the amount you borrow, you’ll benefit even more from lower monthly repayments. Most lenders require a minimum deposit of 5% but on a property value of £350,000, they will probably ask for more.
What Do I Need To Calculate Monthly Repayments For My Mortgage Deal?
The best way to figure out what your monthly payments will be on your £350,000 mortgage is to use an online mortgage calculator that can instantly give you information about the likely charges you’ll face for your mortgage each month.
To get an accurate estimate from the calculator you’ll need to have the following information about the mortgage deals you’re considering:
- the exact amount you want to borrow
- the mortgage term
- the type of mortgage
- the mortgage interest rate
- any additional mortgage fees
With this information, an online calculator can give you an accurate idea about the monthly costs associated with the mortgage, and you’ll be better able to decide which deal is right for you.
To help you, we’ve provided some reference tables below to give you an estimate of what monthly repayments for a £350,000 mortgage may look like.
What Will I Pay Each Month For A £350,000 Mortgage In The UK?
Repayment Mortgages
| Likely Monthly Payments On A £350,000 Repayment Mortgage (All Figures Given Are Estimates Only ~) | ||||
| Interest Rates | ||||
| Length of Mortgage Term | 2.5% | 3.5% | 4.5% | 5.5% |
| 5 Years | £6212 | £6368 | £6524 | £6685 |
| 10 Years | £3300 | £3462 | £3627 | £3798 |
| 15 Years | £2334 | £2503 | £2677 | £2860 |
| 20 Years | £1855 | £2030 | £2214 | £2407 |
| 25 Years | £1570 | £1753 | £1945 | £2149 |
| 30 Years | £1383 | £1572 | £1773 | £1987 |
Interest Only Mortgages
| Likely Monthly Payments On A £350,000 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 | £730 | £1022 | £1311 | £1604 |
With an interest only mortgage, the length of the mortgage term doesn’t affect the monthly repayment because you are only covering the interest payments on the loan.
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Use A Mortgage Broker To Get The Best Deals
Mortgage providers won’t always know what the best mortgage deal for you is because they simply offer their own products and if you think it works for you then you will apply. A mortgage broker is different.
A mortgage broker gets to know you and your circumstances well enough to be able to suggest the best deals for you across the whole of the market. They can put you in touch with the right mortgage provider, including lenders that might not be readily available on the high street.
At When The Bank Says No we offer a mortgage broker service to those with poor credit histories and existing debts that might make them ineligible for mortgages from traditional high street lenders. That means we can help you access mortgages even when mainstream lenders may have rejected you in the past.
350K Mortgage Repayments Summary
For a £350,000 mortgage your monthly repayments will almost certainly look slightly different from the estimates outlined here, because your actual mortgage deal may not be exactly the same as the examples given in this article.
Our guide is designed to give you a better idea about what your monthly repayments may look like to help you decide on the sort of deal you should look out for when applying for a mortgage and to ensure you can afford the repayments reliably each month.
If you need support finding the right mortgage deal, then work with us today – we’re always happy to help.