Can I get a mortgage for £150,000?

Everyone’s circumstances are different as are their needs when it comes to their borrowing requirements. As such, mortgages come in all shapes and sizes.

How much are the repayments on a £150,000 mortgage?

The answer to this depends on varying situations such as:

• The term: If on a repayment mortgage the term of the mortgage will affect how much the monthly payment is. The longer the term the lower the payment, however in turn the more interest you will likely pay. The reverse applies if the term is shorter.
• Repayment type: A capital and interest mortgage, or more commonly known as a repayment mortgage, will be more per month than an interest only. This is because the former will include part of the loan capital each month whereas with interest only the payment just covers the interest due.
• Interest rate: As what you pay each month is to cover the interest for borrowing the money, the rate you are charged will impact the amount you pay. The higher the rate the higher the payment and vice versa.

How to calculate what a £150,000 mortgage payment will be

If considering a mortgage for £150,000 you will likely want to know how much the payment will be. You can of course carry out a manual calculation for this, however without insulting your intelligence, the formula to be used to calculate the payment for a capital and interest mortgage is quite complicated, so instead we would recommend that you use a repayments calculator. You can of course still use a mortgage repayments calculator to work things out for an interest only mortgage however this is also much simpler to work out manually. Just use this formula:

Loan amount x interest rate ÷ 12 (months of the year) = monthly payment

Eg £150,000 x 3% = 4,500 ÷ 12 = £375 per month

Many calculators can be used to provide this information with some very basic details being provided. These are usually:

• The amount you want to borrow
• Type of repayment method, eg repayment or interest only
• The term (this will either be requested in years and/or months)
• The interest rate you wish to use. We recommend you calculate this not just on the rate at the time but also at a higher rate to gauge your affordability in the future should rate rises occur. Remember a mortgage is usually a long term commitment and much can change over this period.

If you’ve not got time to use a calculator we’ve put below a guide to what a £150,000 repayment mortgage could cost per month over varying terms and interest rates.

                                Rate

Term                      2.5%          3.5%        4.5%          5.5%

10 years                  £1,414      £1,483      £1,555          £1,628

15 years                  £1,000     £1,072      £1,147          £1,226

20 years                 £795         £870         £ 949           £1,032

25 years                 £673         £751          £ 834           £ 921

30 years                 £593        £674          £ 760          £ 852

35 years                 £ 536        £ 620        £ 710         £ 806

How can a mortgage broker help?

No one wants to pay more than they deem necessary for their mortgage and on a £150,000 loan the impact of not arranging the mortgage in the most appropriate way for your needs can be costly. A mortgage broker can use their knowledge and expertise to try and ensure your mortgage needs are looked after, not only at the outset but all throughout the lifetime of the borrowing.

If you are a first-time buyer you will have not gained any knowledge from arranging a mortgage in the past, and even those that have the experience of owning a property it is likely they will not have set up too many mortgages. A mortgage broker deals with mortgages for a living and can use their expertise to offer guidance and solutions to how best to arrange a mortgage of £150,000. It is likely they can discuss things with you that you perhaps have not even given any consideration to.

The advisors here at Just Mortgage Brokers, and our trusted associates, also have the technology at their disposal to be able to source the most appropriate scheme for your needs. This should give you the reassurances required that they are here to look after your best interests.

Any other factors

How much do you need to borrow? Do you need £150,000 or could you borrow less? Of course, the less you borrow the less it will cost you. The flip side of this is do make sure you borrow enough. Don’t leave yourself short for any plans you may have and then either not be able to finish what you started or possibly have to borrow more money later down the line at a potentially higher interest rate. Do make sure whatever you decide upon that it is within your budget.

By reducing the amount you borrow will in turn drop your loan to value (LTV), i.e. the ratio of how much your loan is in relation to the property value or purchase price. You could find that this in turn provides you a better interest rate. For example a mortgage of £150,000 on a property value of £195,000 would be a 77% LTV whereas if you dropped the loan slightly to £146,250 this would now put you at 75% LTV, and in turn you’ll likely have a better interest rate available to you.