£600 – £700 Per Month Mortgages

In this guide, we’ll tell you how much you can borrow for a £600 – £700 per month mortgage and how to boost your chances of getting approved.

What mortgage can you get for £600 – £700 per month?

The exact amount you’ll be able to borrow will vary depending on your specific circumstances, but based on an average interest rate of 4.5% and a standard term length of 25 years, you should be able to borrow between £107,946 and £125,937.

Your maximum borrowing is, however, based on a multiple of your income – typically 4.5 times your annual salary – rather than a set amount you’ve budgeted for mortgage payments each month.

The following tables show your borrowing potential based on these sorts of monthly repayments.

£550 a month

£600 a month

£650 a month

£700 a month

Calculate your maximum borrowing

It’s important to note that your maximum borrowing limit won’t be based on how much you have available for monthly repayments. Rather, lenders will base their borrowing decisions on a multiple of your income. Most will let you borrow between 4-4.5 times your annual salary, but some can go higher – even as high as 6 times your income in certain circumstances.

The calculator below will tell you roughly how much you’ll be able to borrow if you want to keep your monthly payments between £600 and £700.

What factors affect whether you’ll pay this amount?

Affordability is calculated based on an assessment of your income and outgoings, but the two main factors that will determine whether your mortgage payments are kept within budget amount are the interest rate and the term length.

Interest rate

As the tables at the start of the article showed, lower interest rates result in lower monthly repayments. In the case of a £700 per month mortgage, you can borrow over £17,000 more for the budget if you secure a rate of 4.5% instead of 6%.

The size of your deposit will be crucial here. The more money you can put down, the lower the rate you’ll likely be offered as lenders will consider you a less risky borrower.

However, it’s not all about deposit size. Meeting certain eligibility criteria will also enhance your chances of securing a competitive rate. For example, lenders will look at how much you earn, your credit history, your age, your employment status and the type of property you’re buying.

Term length

Opting for a longer mortgage term is another way to keep your monthly repayments down.

The standard term length in the UK is 25 years. However, depending on your individual circumstances, lenders may offer you a longer term of 30, 35 or even 40 years. Just remember, the longer the term, the more you’ll end up paying overall as you’ll be making interest and capital payments for a longer period of time.

The table below shows how term length can impact how much you pay each month. For the purposes of this illustration, let’s assume you’re borrowing £130,000 at 4.5%. As you can see, it’s not until you extend the term to 30 years, that this mortgage becomes affordable for the £600 – £700 monthly budget.

For the purpose of both these tables, we assume the interest rate stays the same for the full length of the mortgage. Interest rates can change if you decide to remortgage on to a different rate or move from a fixed or discounted deal on to the lender’s standard variable rate (SVR).

How a broker can help with a £600 – £700 budget

When applying for a mortgage, it’s always a good idea to seek advice from a broker who can help you find the best deal and guide you through the application process. However, if you’re on a fixed budget and want to make sure you’re not paying more than £700 a month, a broker is essential. They can:

• Share tips on how to improve your application so that lenders are more likely to offer you lower interest rates and agree on the term length you need, making your budget go further.
• Scour the whole of the lending market to present you with a lender more willing to offer 5 or 6 times a salary.
• Negotiate a deal on your behalf, utilising their expert knowledge and experience in getting similar mortgages for other buyers.
• Find you a lender who offers high-income multiples and accepts 100% of any supplemental income you might have

Several brokers, we work with specialise in securing these types of deals. They can review your finances, suggest the type of product that will best suit you, and match you with the right lender, saving you both time and, more importantly, money.

They also get access to exclusive deals and can negotiate with lenders on your behalf. Get in touch today and we’ll match you with an expert broker from our extensive network.

Options if you can’t make this budget work

If you want your repayments to be £700 a month, you can opt for either a capital repayment mortgage or an interest-only mortgage.

Interest-only mortgages are a good way to keep your monthly repayments down because with these, you only pay back the interest on the loan each month. You then repay the original amount borrowed as a lump sum at the end of your mortgage term. With capital repayment mortgages, your monthly payments go towards paying back the interest and some of the initial loan.

While an interest-only loan may seem like an appealing route, it can be high risk because you’ll eventually have to pay off the original loan amount using a bespoke repayment vehicle. If you can’t, you may have to sell your property as well as other assets if it’s in negative equity (i.e. if the sale of the property is not enough to cover the loan).

Connect with an expert broker who can help with your monthly budget

With a maximum of £700 a month to put towards your mortgage, you should seek help from an experienced broker who specialises in this sort of situation and who can match you to the right lender for your circumstances.

Our broker-matching service can connect you with an expert who will help you find the perfect deal. Give us a call on 0808 189 2301 or make an enquiry and get matched with an expert today for a free initial conversation.