Whether you’re buying your first homeremortgaging, or looking at moving home, one of the biggest worries about getting a mortgage is how much the monthly repayments will be. You want to make sure that you can easily afford the repayments so that you’re not at risk of missing or making a late payment and having your home repossessed. That's why it can be so important to calculate your repayments and look at ways of reducing your monthly mortgage costs.

Once you know how much you want to borrow, such as a £150,000 mortgage, you’ll be in a better position to work out the kind of deals available to you and what this means for your monthly payments as well as the overall mortgage costs.

In this article, we look at what to expect with a £150,000 mortgage, the different factors that can affect your monthly repayments on a £150,000 mortgage and how brokers can help you lower this. We also discuss different things you need to consider when you work out how much your new home will cost you overall and what you need to consider before you apply for a mortgage and settle on a deal.

What Is a £150,000 Mortgage?

A £150,000 mortgage is a secured loan taken out by a borrower to purchase or refinance a property. The mortgage amount borrowed from a lender is £150,000. This excludes the deposits which is normally 5% - 10% of the property’s purchase price.

You pay interest on the £150,000 borrowed from the lender. Typically, you take out a repayment mortgage on a residential property, which means you make capital repayments on the £150,000 and interest payments each month. By making regular capital repayments, you end up paying back the amount borrowed over the mortgage term – e.g. 15, 20 or 25 years.

If you don’t meet your regular payments, you run the risk of having your home repossessed by the lender.

Can I Afford a £150,000 Mortgage?

To afford a £150,000 mortgage you need to meet the lender’s criteria, including their income requirements. Most lenders will work the maximum amount you can potentially borrow by using a mortgage income multiple such as 4.5. So, in order to be eligible to borrow a £150,000 mortgage, you would likely need to earn at least £35,000 per year (£35,000 x 4.5 = £157,500).

What Affects the Interest Payments and Capital Repayments on a £150,000 Mortgage?

There are plenty of different factors that can affect the monthly interest and capital repayments on a £150,000 mortgage, such as:

  • Your mortgage affordability and monthly outgoings  – how much disposable income you have available to go towards £150,000 mortgage repayments each month will impact things like your mortgage term which in turn impacts your repayments
  • Whether you opt for repayment or interest-only – repayment mortgages have higher monthly payments but lower overall interest costs
  • The mortgage term – a shorter term means higher monthly payments but less interest charged overall, while a longer term means lower monthly payments but more interest charged overall
  • The deposit you put down – a larger deposit can lower your LTV (loan-to-value) and help you secure a cheaper rate
  • The interest rate – how expensive or cheap the rate is as well as whether you choose fixed or variable
  • Fees – you may have some fees such as arrangement fees added to the overall mortgage amount

Before discussing how to calculate your monthly repayments on a £150,000 mortgage, we'll go over the ways that these can affect your payments in more detail.

Monthly Outgoings Impact on £150,000 Mortgage Payments

Once a lender has determined that your annual income is enough to afford a £150,000 mortgage, they’ll look at your monthly outgoings to assess what you can afford to pay back on a regular basis. Although it seems counterintuitive to determine your monthly payments by working out what you can afford in monthly payments, it gives lenders the scope they need to decide on the terms of your deal (such as the mortgage term) and whether you can actually afford to borrow the amount you want.

Repayment vs Interest-Only £150,000 Mortgages

When you take out a mortgage you typically secure it on a repayment or interest-only basis.

With a repayment mortgage, your monthly payments are made up of a capital repayment and an interest payment, which means you pay back the amount you borrowed plus interest over the mortgage term.

With an interest-only mortgage deal, your monthly payments are made up of just interest payments. This means you don’t make any capital repayments until the end of the mortgage term when you pay back the loan via a suitable repayment vehicle such as money from investments or selling the property. Because with an interest-only mortgage the outstanding loan balance isn’t reducing every month – and the interest is charged on the outstanding loan balance – you end up paying more interest overall on an interest-only mortgage despite the lower monthly payments.

Mortgage Term Impact on Cost of £150,000 Mortgage

The mortgage term is the amount of time over which you pay off your loan (or have to repay it by). This usually happens in intervals of 5 years, up to 40 years, though some lenders will offer loans shorter than 5 years.

On a repayment mortgage, your mortgage affordability and term length go hand in hand: the term length will be impacted by what you can afford to pay each month (based on your income and monthly outgoings), and what you pay each month will be impacted by the term length.

Essentially, the longer you have to repay your mortgage the lower your monthly payments will be, and the shorter the period you have to repay your mortgage the higher your monthly payments will be.

This means that you may have to opt for a different mortgage term than you first wanted in order to comfortably afford the monthly capital repayments and interest payments.

Bear in mind that a longer term length will also increase the amount of interest that you pay over the course of your mortgage. This is true for repayment and interest-only mortgages, however the mortgage term won’t impact your monthly payments on an interest-only mortgage as the outstanding loan amount stays the same until the end of the term.

Deposit on £150,000 Mortgage

There are 2 main ways that the home mortgage deposit you pay can affect your mortgage repayments. The first is the simplest: you can increase your deposit amount to lower the amount of money you need to borrow, and thus lower the amount you need to pay back. This means that the mortgage on a £150,000 house with a 20% deposit would only be £120,000, while a standard minimum 5% deposit would mean taking out a loan of £142,500. If you can afford a larger deposit to lower your loan amount you could save a lot of interest in the long run. It can also help if you’re limited in how much you can borrow.

The second effect that the deposit can have is in helping you get access to better interest rates. The higher your deposit, the lower your (LTV) loan-to-value will be – assuming you don’t also want to borrow more. A lower LTV will give you access to more mortgage lenders, and therefore better deals.

Putting forward a higher deposit can therefore decrease the loan amount you need to pay off as well as the interest you pay.

Interest Rates and Effect on Mortgage Payments

One of the big factors that can affect your monthly payments is the interest rate. Now, the interest rate won’t necessarily impact the part of your monthly payment that goes towards repaying the mortgage (capital repayment) but it will affect the part that makes up the interest payment. A higher interest rate essentially means potentially higher overall monthly payments which is why you’ll usually want to try and secure a lower interest rate.

You’ll also have the option of a fixed rate or a variable (typically tracker) rate. A fixed rate essentially means you’re charged a fixed rate of interest during the deal period while a tracker fluctuates in line with the Base Rate. Fixed rates offer more stability and make it easier to budget as your monthly payments don’t fluctuate, but tracker rates can sometimes be more cost-effective. The best rate for you will depend on your situation and market conditions. Discuss this with your mortgage adviser to find out more.

How to Secure a Lower Mortgage Rate on a £150,000 Mortgage

Improving your credit score and providing a larger deposit can both give you access to more lenders and cheaper mortgage rates, as well as using an independent mortgage broker like John Charcol.

Cost of Repayments on £150,000 Mortgage

Some examples of monthly payments on a £150,000 fixed interest rate repayment mortgage.

Length of Mortgage

2% Interest Rate

3% Interest Rate

4% Interest Rate

5% Interest Rate

10 Years





15 Years





20 Years





25 Years





30 Years





£150,000 Interest-Only Mortgage Payment Costs

If you have an interest-only mortgage, your monthly payments will be much lower than a repayment mortgage. As an example, the interest-only payments on a £150,000 mortgage would be as follows:

Interest Rate





Monthly Payment





Again, on a flexible interest rate, this would change during the course of your mortgage. You might also be offered a very different interest rate than those listed above.

You would also pay more in interest overall than on a repayment mortgage.

£150,000 Mortgage Calculators

If you're looking at getting a £150,000 mortgage, you might want to estimate how much your monthly payments will be before you make any firm decisions. Of course, until you get a mortgage offer you can only estimate the specifics of your deal, but it can still be very useful to get a rough idea of how much you’ll have to pay each month.

First, work out how much you can borrow based on your income with our calculator. Second compare mortgage deals to see what kind of interest rates could be available to you. Third, use our mortgage repayment calculator to work out your potential monthly payments.

How a Broker Can Help You Get Lower Payments on a £150,000 Mortgage

Getting the help of an independent mortgage broker like John Charcol is the simplest way to ensure you get the best mortgage deal.

Whether the best deal for you means lower monthly payments, a shorter mortgage term, a low deposit mortgage, the cheapest rate, overpayment facilities or something else, we’ll be able to help.

Our experts will listen to your requirements and needs and give you advice on the different things to consider, so you know you’re going in the right direction.

Finally, we can also help you secure a competitive deal even in complex situations, such as if you have bad credit or require lending on a specialist property.

Here at John Charcol, we have years of experience in helping people find great deals on their mortgages. Get in touch today to see how we can help you minimise your monthly repayments.

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