Looking for a £300,000 mortgage but not sure if you can afford the repayments? Don’t worry, we’ll explain everything you need to know about repayments on a £300,000 mortgage in this guide.

One of the most common concerns people have is whether or not they can afford the repayments on the size of mortgage they’re after. Whether you’re buying your first homeremortgaging, or looking at moving home, you need to make sure that you're getting a mortgage product that suits your needs.

This is because the risk of being unable to make your monthly repayments could lead to everyone's worst nightmare: your home being repossessed.

To help make sure you can afford your monthly obligations, there are various ways to calculate your repayments as well as ways that you can lower your monthly costs on your mortgage loan. Working out your potential monthly payments becomes much easier once you have an idea in mind of what want to and can actually borrow, such as a £300,000 mortgage.

Here we'll go over who’s eligible for a £300,000 mortgage, how the repayments work and what factors affect them, as well as ways that experienced mortgage brokers can help you lower these. We'll also look at other factors you need to consider before deciding on a mortgage size and applying for a mortgage.

Am I Eligible for a £300,000 Mortgage?

To be eligible for a £300,000 mortgage you need to meet lender mortgage affordability criteria. Banks and lenders will often typically look at how much you can borrow based on your income and your monthly outgoings as part of their affordability assessment. They will often use a mortgage income multiple such as 4.5x your income to calculate the maximum amount you can borrow. 4.5 is a common income multiple used by lenders but depending on their criteria and your situation some lenders may calculate your maximum borrowing using a higher or lower income multiple. The lender will then work out what they can actually lend you and over what mortgage term, based on what you can afford to repay by looking at your monthly outgoings.

They will also have minimum deposit requirements in order for you to be eligible. The amount you can put forward in deposit and factors such as your credit history will have an impact on the kind of product they’re able to offer you.

What Income Do I Need for a £300,000 Mortgage?

You’ll likely need an annual income of around £70,000 to be eligible for a £300,000 mortgage (£70,000 x 4.5 = £315,000). This £70,000 can be the total amount of all co-applicants – e.g. you and your partner earn £35,000 per year each and are applying for the mortgage together.

The above example assumes an income multiple of the commonly used 4.5, although some lenders will use higher or lower income multiples depending on your situation and their criteria.

What Deposit Do I Need for a £300,000 Mortgage?

Most lenders will want a deposit of at least 5% - 10% of the property purchase price.

  • For a mortgage on a £300,000 house, this would work out at £15,000 - £30,000
  • For a mortgage of around £300,000 on a house worth £330,000, you would need about £16,500 - £33,000 in deposit

You might find that some lenders might request a higher deposit, depending on your circumstances, your credit score or the property.

What Affects the Repayments on a £300,000 Mortgage?

There are several different factors that can affect the repayments on a £300,000 mortgage. These include:

  • Whether you're paying off the loan during the term, or whether you have an interest-only mortgage
  • Your monthly outgoings
  • The size of the deposit you put down
  • The term length of the mortgage loan
  • The interest rate, both in terms of how high your interest rate is, and whether it is a fixed rate or variable rate

There’s a lot to consider which can impact exactly how much your monthly payments will be. However, you can estimate what to expect long before you receive a mortgage offer.

What Is the Difference Between the Monthly Payments on a £300,000 Repayment Mortgage vs a £300,000 Interest-Only Mortgage?

With a £300,000 repayment mortgage, you make payments each month comprising a capital repayment and interest payment. The capital repayment goes towards paying off the £300,000 you initially borrowed, while the interest payment is calculated based on the amount outstanding at that time. This means that over the mortgage term, you pay off more and more of the outstanding loan amount and less and less in interest, until eventually it’s completely paid off and you have 100% equity in your property.

With a £300,000 interest-only mortgage, you only make interest payments each month. Your monthly payments will therefore be lower with an interest-only mortgage, but you won’t pay off any of the capital until the end of the mortgage term, via a suitable repayment vehicle such as funds from investments or selling assets.

You pay more interest overall with an interest-only mortgage but have lower monthly payments comprising interest payments only, whereas you pay less interest overall with a repayment mortgage, but have higher monthly payments comprising capital repayments and interest payments.

How Do Monthly Outgoings Affect Repayments?

The lender will look at your monthly outgoings to consider how much left over income you have left each month to comfortably go towards mortgage payments. This will then help them figure out how close to your maximum borrowing you can borrow and over what kind of term you can afford to pay back the mortgage.

How Does the Deposit Affect Repayments?

The house mortgage deposit is paid at exchange of contracts and is a percentage of the property purchase price. The minimum amount required for a mortgage deposit is 5% - 10%.

Paying a larger deposit can lower your monthly interest payments and capital repayments on a £300,000 mortgage.

Firstly, providing more in deposit can be a way to borrow less on your mortgage, ultimately reducing the amount you’ll have to pay back and the total interest charged.

Secondly, a larger deposit can lower your LTV (loan-to-value) whether you choose to borrow less or simply use that extra deposit towards a more expensive property. A lower LTV will give you access to better rates which will again reduce the amount of interest charged.

How Does the Mortgage Term Affect Repayments?

The mortgage term is how long you have to pay back the loan. This is usually calculated in multiples of 5 years, and typical mortgage terms last from 5 years - 40 years.

The mortgage term will only impact the monthly payments on a repayment mortgage, not an interest-only mortgage. This is because the cost of paying back the mortgage (i.e. the repayments) is spread out over the mortgage term with a repayment product, but with an interest-only product, the term doesn’t affect the monthly payments as the loan amount the interest is charged on stays the same until the end of the term.

Therefore, the longer your mortgage term on a repayment mortgage, the less your monthly payments will be. And the shorter your mortgage term on a repayment mortgage, the more your monthly payments will be. However, a longer mortgage term on any mortgage will increase the amount of interest you pay overall, as interest is being charged over a longer period.

How Do Interest Rates Affect Mortgage Payments?

You typically pay interest each month on a mortgage, whether it’s repayment or interest-only. The interest is charged on the outstanding loan amount at that time, which is why you often pay more interest on an interest-only mortgage (since the outstanding loan amount doesn’t reduce over the course of the mortgage term).

A lower interest rate essentially means lower monthly payments.

Typically, the more risk you are to the lender, the higher your interest rate. If you're a low risk borrower, with a large deposit and great credit history, you'll find that lenders offer more competitive interest rates.

Fixed and Variable Interest Rates

Another thing to consider with interest rates is whether to opt for a fixed or variable rate, such as a tracker.

When you take out a mortgage, you’ll be offered an introductory rate for a period of time such as 2 or 5 years. This will usually be a fixed or tracker rate. After your introductory rate period ends, you’ll be transferred onto your lender’s more expensive SVR (standard variable rate) for the remainder of the mortgage term unless you choose to remortgage onto a better deal.

A fixed interest rate stays the same while a tracker rate moves in line with the Bank of England Base Rate. So, how does this impact your monthly payments? Well with a fixed rate, your monthly payments will stay the same, while with a tracker rate, your monthly payments will fluctuate slightly. What works out better (and cheaper) for you will depend on your situation, the lender’s available to you and market conditions.

How Your Credit Score Affects Your Interest Rate

Lenders will often look at your credit score and history when you apply for a mortgage. Your credit history shows how you’ve managed your finances in the past and whether you’ve paid back debts and loans on time. If you have a good credit score, you're likely to be offered more competitive interest rates. If your credit history shows late payments, defaults, County Court Judgments, bankruptcy, house repossession, or other issues, you’ll likely have to accept a higher interest rate to get a mortgage. Not all credit issues have the same negative impact on your credit profile and the longer ago they occurred, the less impact they’ll have.

How to Calculate Monthly Repayments


To calculate what your monthly mortgage payments could be before settling on a property or amount you want to borrow, you can use a few different tools such as best buys and calculators.

£300,000 Mortgage Calculators and Best Buys

First, compare £300,000 mortgage deals with our best buys tool. This will give you an idea of the kinds of rate to expect.

Second, use our mortgage repayment calculator to work out how much you could be paying each month and what impact the different term lengths and interest rates could have.

Cost of £300,000 Mortgage Payments

For a quick estimate of the potential monthly cost of a £300,000 mortgage set up on a repayment basis, see the table below.

Length of Mortgage

3% Interest Rate

4% Interest Rate

5% Interest Rate

6% Interest Rate

10 Years





15 Years





20 Years





25 Years





30 Years





Interest-Only Mortgage Payments for a £300,000 Mortgage

If you're looking for an interest-only mortgage, your monthly payments will be lower than those on a repayment mortgage. But, bear in mind you’ll have to repay the outstanding loan amount at the end of the mortgage term via a suitable repayment vehicle approved by the lender. Again, as you make no monthly repayments, the mortgage term does not impact what you pay each month.

See our table below for an idea of the interest-only payments on a £300,000 mortgage.

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.

How a Mortgage Broker Can Help Lower Your Repayments on a £300,000 Mortgage

Independent mortgage brokers like John Charcol can often help reduce your monthly payments by offering advice and ultimately getting you a better deal on your mortgage without you having to shop around for different lenders and rates, including if you have complex circumstances such as alternative income sources, bad credit issues, you’re looking to buy a non-standard construction property and more.

We also have access to a much larger pool of mortgage lenders which means possible access to more flexible criteria, lower rates and extras such as overpayment facilities, offset savings accounts and more.

Secure your £300,000 mortgage by getting in touch today and calling us on 0330 433 2927.

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