Head Content Writer
Director
Welcome to our guide to £200k mortgages. Here you will learn how much you need to earn to get a mortgage of this amount, how much the repayments are, and how to apply for one.
You’ll also find free calculator tools to crunch the numbers yourself.
How much do you need to earn to get a £200,000 mortgage?
You would need to be earning somewhere between £44,000 and £50,000 to get approved for a mortgage of £200,000. Most lenders will let eligible customers borrow 4.5 times their annual salary, while a smaller number cap their maximum lending at 5-6 times income.
If your income is at the lower end of this range, your options might be limited to specialist lenders as they are usually the ones offering 5-6 times salary mortgages. The best way to find one of these lenders is through a mortgage broker, like Echo Finance.
Use our calculator below to get an idea of whether you can afford a £200k mortgage:
What if you don’t earn enough money?
If you earn less than £44,000, it could still be possible to qualify for a £200,0000 mortgage. Firstly, there is the possibility of applying for a joint mortgage of this amount. With joint mortgages, both of the applicants’ income is pooled before the income multiple is applied.
Some lenders will also allow you to declare any supplemental income you might have - such as benefits or freelance work - on top of your main salary to stretch your affordability.
Keep in mind that some mortgage providers will only let you declare a capped percentage of supplemental income, but through a broker you could find one who allows 100%.
How much will the repayments be?
The repayments on a £200k mortgage are typically £1,056 per month. This would be the case if you took out a mortgage of this amount on a capital repayment basis, with a 4% interest rate on a 25 year term, all of which is representative of an average UK mortgage.
Paying this amount each month on a debt of this size would mean you will have repaid £316,702 by the end of the term, although most people remortgage multiple times throughout their agreement and change the terms of it to better fit their needs.
Your exact repayments will vary depending on the interest rate you qualify for, the term length and the mortgage’s product and repayment type.
Use our repayment calculator below to get an idea of how these factors can affect the cost of a £200,000 mortgage.
Factors that affect the cost of a £200k mortgage
Here we will take a closer look at the main variables that determine the exact cost of a £200,000 mortgage, complete with tables containing example calculations for context.
Interest rate
The interest rate you are offered will depend on the overall strength of your application, based on factors such as the amount of deposit you have and your credit score.
The table below shows how the cost of a £200,000 mortgage can vary across different interest rates. These figures are based on a capital repayment product taken over 25 years.
Mortgage Amount | Interest Rate | Monthly Repayments | Overall Repayment |
£200k | 3.5% | £1,001 | £300,374 |
£200k | 4% | £1,056 | £316,702 |
£200k | 4.5% | £1,112 | £333,499 |
£200k | 5% | £1,169 | £350,754 |
£200k | 5.5% | £1,228 | £368,452 |
£200k | 6% | £1,289 | £386,581 |
Term length
The longer the term length, the lower your monthly mortgage payments, but mortgages stretched over a greater term are more expensive overall due to having to pay more interest instalments. The table below illustrates this for a £200k repayment mortgage with a 4% rate.
Mortgage Amount | Term Length | Monthly Repayments | Overall Repayment |
£200k | 15 years | £1,582 | £284,686 |
£200k | 20 years | £1,320 | £316,779 |
£200k | 25 years | £1,169 | £350,754 |
£200k | 30 years | £1,074 | £386,512 |
£200k | 35 years | £1,009 | £423,938 |
£200k | 40 years | £964 | £462,909 |
£200k interest-only mortgage payments
The main alternative to a capital repayment mortgage is an interest-only mortgage, which involves paying only the interest each month and settling the loan at the end of the term.
The table below highlights the cost of a £200k interest-only mortgage across different interest rates, with a 25-year term length used for example purposes.
Mortgage Amount | Interest Rate | Interest-only Payments (Monthly) | Overall Repayment |
£200k | 3.5% | £583 | £375,000 |
£200k | 4% | £667 | £400,000 |
£200k | 4.5% | £1,112 | £333,499 |
£200k | 5% | £1,169 | £350,754 |
£200k | 5.5% | £1,228 | £368,452 |
£200k | 6% | £1,289 | £386,581 |
£200k buy-to-let mortgage payments
Buy-to-let mortgages repayments are calculated in the same way as residential mortgage repayments, but these mortgages have higher rates and are usually interest-only.
The table below offers a rough idea of the typical cost of a £200k buy-to-let mortgage across different term lengths, with an example interest rate of 4.5%.
Mortgage Amount (BTL) | Mortgage Term (Years) | Monthly Repayment (Interest-Only) | Total Repaid (Interest-Only) |
£200k | 10 | £750 | £290,000 |
£200k | 15 | £750 | £335,000 |
£200k | 20 | £750 | £380,000 |
£200k | 25 | £750 | £425,000 |
£200k | 30 | £750 | £470,000 |
Fixed rate vs. variable rate mortgages
The cost of a £200k mortgage will also vary depending on the product type you choose. The most common type in the UK is a fixed-rate mortgage, which involves paying a rate that is set in stone for a set period, usually 2-5 years but sometimes longer or shorter.
When this fixed rate period ends, you will be placed onto the lender’s standard variable rate, which is usually much higher, unless you remortgage onto a new deal.
The most popular alternative is a type of variable rate mortgage called a tracker mortgage, which comes with a rate that can move up or down in line with an external marker, most commonly the Bank of England’s base rate.
How to apply for a £200,000 mortgage
The way to apply for a £200,000 mortgage is to speak to a mortgage broker before you approach any lenders and let them do all of the legwork for you.
By applying for your mortgage through a broker, you will gain access to a wider range of deals, including exclusive rates that aren’t available to borrowers who go direct.
Other benefits of applying for a £200k mortgage through a broker include:
Bespoke advice from start to finish
Access to the entire market
Help with all of your paperwork
No fee for your initial consultation
Ready to take advantage of a free, no-obligation chat with one of Echo Finance’s mortgage brokers to find out how much you could save? Get started here.
FAQs
Your repayments for a £200k commercial mortgage won’t be calculated any differently than they would be for a residential mortgage, but rates and fees are generally higher. Like buy-to-let mortgages, commercial property loans are also usually interest-only.
Find your local adviser
- Residential mortgages: Everything from fixed-rate to tracker mortgages for first-time buyers, homemovers and remortgage borrowers
- Specialist mortgages: For borrowers who fall outside of standard lending criteria, including people with bad credit, self-employed professionals and more
- Later-life lending: Including advice on equity release, mortgages for pensioners and retirement interest only (RIO) mortgages
- Bridging & Commercial: We have specialist advisors on hand for commercial mortgages, bridging loans, development finance and more
- Insurance & Protection: Including life, home and critical illness cover for families and individuals, as well as landlord and business protection insurance
Echo Finance is regulated by the Financial Conduct Authority and is reviewed annually by an independent compliance company. All of our brokers and advisers hold industry-standard qualifications, such as CeMAP, CeRER and DipMap, where required.
We are committed to providing advice through the channels that best suit your needs. Our brokers can provide advice via phone, email, video and web chat from anywhere in the UK, but we also aim to offer face-to-face appointments for those who request them.