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A mortgage of £300,000 would be slightly above the national average in the UK, so it’s important to prepare before you apply for one.
Here you will learn how to calculate the affordability and repayments for a mortgage of this amount and how to go about securing the finance you need.
How much salary do you need to get a £300k mortgage?
You would need to earn at least £66,000 to £75,000 to afford a mortgage of £300,000 as most lenders in the UK won’t let you borrow more than 4.4.5 times your annual salary.
If you don’t earn this much, there are lenders who might stretch to 5-6 times income if you have a particularly strong application. Applying jointly with another applicant or declaring supplemental income like benefits or freelance work can also stretch your affordability.
Use our calculator below to get an idea of whether you will qualify for a £300k mortgage:
What will the repayments be for a mortgage of this amount?
The average repayments on a £300,000 mortgage are around £1,584 per month. This example calculator is for a capital repayment mortgage with a 4% rate taken out over a 25 year term, all of which is representative of a typical UK residential mortgage.
Over the course of the term, you will have paid back a total of £475,053, but keep in mind that repayments usually change over time because most people remortgage multiple times.
Your exact repayments may vary depending on the interest rate you qualify for, the term length you choose and the type of mortgage you take out.
You can play around with these variables using our repayment calculator below:
Factors that determine the cost of a £300k mortgage
Here we take a closer look at the main factors that determine the cost of a £300,000 mortgage complete with example calculations tables for context.
Interest rate
The interest rate you are offered will depend on the overall strength of your application, based on factors such as your credit history and the amount of deposit you have.
The table below shows how the cost of a £300k mortgage can vary across different interest rates, if taken on a capital repayment basis with a term length of 25 years.
Mortgage Amount | Interest Rate | Monthly Repayments | Overall Repayment |
£300k | 3.5% | £1,502 | £450,561 |
£300k | 4% | £1,584 | £475,053 |
£300k | 4.5% | £1,667 | £500,249 |
£300k | 5% | £1,754 | £526,131 |
£300k | 5.5% | £1,842 | £552,679 |
£300k | 6% | £1,933 | £579,871 |
Term length
Selecting a longer term for your mortgage means lower monthly payments, but mortgages with a shorter team cost less overall as there are fewer interest instalments to pay.
The table below shows how the cost of a £300k mortgage can vary across different term lengths, if taken out on a capital repayment basis with a 4% interest rate.
Mortgage Amount | Term Length | Monthly Repayments | Overall Repayment |
£300k | 15 years | £2,373 | £427,029 |
£300k | 20 years | £1,980 | £475,168 |
£300k | 25 years | £1,754 | £526,131 |
£300k | 30 years | £1,610 | £579,767 |
£300k | 35 years | £1,514 | £635,906 |
£300k | 40 years | £1,447 | £694,363 |
Product and repayment type
Different mortgage product types come with their own interest rates, meaning the cost can vary depending on which one you choose. Fixed-rate mortgages, where the interest rate is static for a set period, usually 2-5 years, are the most common type in the UK.
The main alternative is a type of variable rate mortgage called a tracker mortgage, where the rate can go up or down at any point during the term, usually in line with an external marker like the Bank of England’s base rate.
The cost of a £300k mortgage can also vary depending on the repayment type you opt for. The main alternative to capital repayment is interest-only where you would only pay the interest off each month, and the £300k debt at the end of the term.
The table below shows what the repayments on a £300k mortgage would look like on an interest-only agreement, across different rates with a term length of 25 years.
Mortgage Amount | Interest Rate | Interest-only Payments (Monthly) | Overall Repayment |
£300k | 3.5% | £875 | £562,500 |
£300k | 4% | £1,000 | £600,000 |
£300k | 4.5% | £1,125 | £637,500 |
£300k | 5% | £1,250 | £675,000 |
£300k | 5.5% | £1,375 | £712,500 |
£300k | 6% | £1,500 | £750,000 |
£300k buy-to-let mortgages
Buy-to-let mortgage affordability is determined by the projected rental income of the property. Most lenders will need it to exceed the mortgage payments by 125-145%.
Repayments are calculated in the same way they are for residential mortgages, but the rates are generally higher and most buy-to-let mortgages are interest-only.
The table below shows examples of the typical repayments for a £300k buy-to-let mortgage across different term lengths. A higher example rate of 4.5% has been used here.
Mortgage Amount (BTL) | Mortgage Term (Years) | Monthly Repayment (Interest-Only) | Total Repaid (Interest-Only) |
£300k | 10 | £1,125 | £435,000 |
£300k | 15 | £1,125 | £502,500 |
£300k | 20 | £1,125 | £570,000 |
£300k | 25 | £1,125 | £637,500 |
£300k | 30 | £1,125 | £705,000 |
How to apply for a £300k mortgage
The way to apply for a £300,000 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 £300k 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
You might find it difficult to borrow the full £300k as 100% LTV mortgages are difficult to come by, though they do exist.
Generally speaking, you will need to put down at least 5% of the property’s value as a deposit, which amounts to £15k in this scenario, and take out a £285k mortgage.
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