£3,000 Per Month Mortgages

In this article, we will look at what sort of mortgage you can get for £3,000 per month and some steps you can take to make your budget go even further.

What mortgage can you get for £3,000 a month?

For £3,000 a month, there are a lot of variables which could affect what mortgage amount you could borrow. These include the deposit size, mortgage interest rate and mortgage term (how long your mortgage will be borrowed for). 

However, to get a rough understanding of how much mortgage could be borrowed if you want to spend £3,000 you can see the illustration below which gives examples showing how the difference in interest rate can change the amount you could borrow.

Over a 25-year mortgage term, the amount you could borrow could range between £465,600 to £568,300 if you wanted to spend £3,000 per month.

If you think the mortgage term or the interest rate might be different to the above examples, you can use the repayment calculator below to check how much you might be able to borrow:

Factors impacting mortgage size and repayments

Each of the following factors has a relationship with the size of your monthly mortgage repayments.

Property value and deposit size

Naturally, the size of your monthly repayments will tend to increase if you buy a more expensive property, but a higher deposit could offset this. Higher deposits should also unlock better rates, as you’ll have a larger pool of lenders to choose from.

For example, if you’re a first-time buyer with a 10% deposit, you could potentially buy a £650,000 home (with a £65,000 deposit) and your initial repayments would be approximately £3,000 a month.

Whereas, if you’re further along the property ladder, and have been paying off a mortgage for many years, you might have built up a lot of equity in that time. With a deposit of £650,000, you could potentially buy a £1.2 million home at the same monthly repayments.

Repayment term

There are plenty of mortgage options with shorter or longer terms, ranging from 10 to 40 years.

Changing the mortgage repayment term has a huge impact on the size of your monthly repayments but will also change how much you spend overall. Shorter mortgages have higher monthly payments but will cost you less than a longer-term mortgage.

Which option you choose depends on your circumstances. For example, if you want to buy a £1 million home and have a deposit of £150,000, a 40-year repayment term and an initial rate of 2.93% would result in a mortgage of just over £3,000 a month.

Someone who is much later in life might have equity of £675,000 to put towards the same home. With an initial rate of 2.05%, they could choose to repay their mortgage over 10 years for around £3,000 a month.

Mortgage rate

Mortgage rates are mainly dictated by the Bank of England base rate and the lower the rate, the less your monthly repayments. Your rate will depend on:

• Your deposit size. If you have a large deposit, you’ll usually be able to find a better rate than someone with a small deposit.
• Your credit history. If you have a good credit history, you’ll have more mortgages to choose from and may find a better rate than someone with bad credit.
• Your rate type. If you choose a fixed-rate mortgage (as most buyers do), you’ll pay a little more initially than someone who chooses a variable-rate mortgage.
• Your initial period. Fixed rates are usually guaranteed for a period of 2, 3, or 5 years, with some lenders offering lower rates for longer-term commitments, depending on the economic climate.
• Your lender. All lenders are free to establish their own rates, so it’s important to shop around to find the best available rates at the time

Factors that determine affordability

One of the final hurdles in getting a £3,000 a month mortgage is passing the lender’s affordability checks. They will need to assess whether you can afford to repay the amount you’ve applied to borrow over your requested repayment term.

To do this, they’ll look at your income, spending, and debts. Your employment status, credit history, and profession can also affect your chances of approval.

One rule to bear in mind is that lenders typically cap the amount they’ll approve based on a multiple of your income. For most lenders, it’s 4-4.5 times your income. So, to buy a £700,000 house with a £70,000 deposit, you would probably need an income of upwards of £140,000. If you’re applying for a joint mortgage, this would be your combined income.

You can use the mortgage affordability calculator to see how this could look for you, based on your own annual salary:

Finding a broker experienced in larger mortgages

As the examples we’ve discussed show, a £3,000 a month mortgage can look very different for different buyers. The unique details of your property purchase and financial situation all play a role in which mortgage is best for you.

That’s why it’s so important to get a broker who understands your needs and has experience in finding mortgages for buyers in similar circumstances. They’ll help you tailor all of the variables to result in monthly repayments you can afford.

If you’d like to be matched with a specialist broker based on some of your personal details, we offer a free service to do just that. Then, you’ll be connected with them for a no-obligation chat so you can see if they’re right for you. To try it today, call us on 0808 189 2301 or make an enquiry.