£350,000 Mortgages

There are lots of properties across the country currently priced at over £350,000. If one of these has caught your eye and you think you might require a mortgage of almost this amount, you’ll need to check you can afford it, both in terms of the repayments and the deposit required.

This guide will help you figure out both of these components, giving you a clearer answer as to whether you can feasibly pay back a mortgage of around £350,000 and, if so, how to go about getting one.

What do you need to qualify for a £350,000 mortgage?

First and foremost, you need to establish whether you earn enough to get a mortgage of this amount and have enough deposit saved up. Checking this with a broker prior to applying will save you time and prevent any possible rejections that could count against you down the line.

Try our mortgage affordability calculator below to find out whether your income stretches far enough, based on the standard income multiples most lenders use to assess affordability.

How much deposit will you need?

Lenders typically seek 10% of the property’s value as a mortgage deposit.

With a property worth £350,000 you’d therefore be looking to put down a minimum of £35,000. If you can afford to contribute a little more that would reduce your monthly repayments whilst also giving you more lenders to choose from – lenders don’t like high levels of risk and a big deposit removes some of that.

There are a few lenders willing to offer a loan with a 5% deposit but these aren’t as common. A broker would be able to source a few if that’s an option you wanted to explore.

Income requirements

There’s no magic number here as a lender will consider numerous factors to determine whether you can afford £350,000 as a loan but, as an indicator, most lenders are willing to lend 4.5 times a salary. With that in mind, for a £350,000 mortgage your annual salary would need to be around £78,000. A bigger deposit could reduce that closer to £70,000.

Whilst that is a relatively large amount – especially considering the average salary in the UK is currently £25,971 – it can be spread across two people’s incomes, making it more manageable.

Some lenders are also willing to go above the 4.5 figure and lend even 5 or 6 times a salary in certain circumstances – such as when the borrower is putting down a bigger deposit or works in a certain profession, such as a doctor or lawyer. A broker would be able to share a list of lenders potentially willing to loan above that amount.

Example calculations

The table below breaks down what 4.5, 5 and 6 times a salary could get you on a mortgage based on a range of different salaries.

An expert would be able to give you a more specific idea of the amount you could expect a lender to approve based on your salary and outgoings as well as eligibility factors that could have an indirect impact on your borrowing capacity. They could also share any government schemes you might be eligible for.

How much your repayments could be

What a £350,000 mortgage will mean for your bank account each month will depend on the interest rate and mortgage term agreed. Rates usually range between 1.5% and 4.5%. A bigger deposit might offset a higher rate while bad credit could see that interest rate rise.

Mortgage terms are typically 25 years but, in some cases, these can also be altered. For example, Halifax often offers a 35-year term while Accord Mortgages is happy to lend up to 40 years.

Try our mortgage repayments calculation below to get a clear idea of how your monthly payments could look.

Example repayment calculations

The below table estimates what you could expect to pay each month for a £350,000 repayment mortgage, depending on various rates and terms.

Interest only as an option

When it comes to repaying your loan you can opt for capital repayment – this sees your monthly repayment go toward the interest rate and the loan – or interest only – where the monthly repayment only pays off the interest element. Many lenders offer this option as long as you can prove you have a viable way of paying off the whole £350,000 at the end of the term. You’ll also likely have to put up a larger deposit but this will mean your monthly repayments are smaller.

Interest only mortgages are usually the more popular option for buy-to-let properties, where the interest repayment is offset using rental income and the capital can be repaid using profits from the sale of the investment property.

A broker would be able to consult on what length of term you should be opting for while advising on how to go about getting a more favourable rate.

How a broker can help you get a mortgage for this amount

A few quick calculations can give you a rough idea of what you can afford as a mortgage but when it comes to something as big as purchasing a home it’s best to avoid any speculation. This is where a broker can help. A vital port of call before applying to a lender, they can assess your individual situation and:

1. Confirm that you can indeed afford a £350,000 mortgage before you apply to a lender, limiting the chance of getting rejected.
2. Advise on how to access lower monthly repayments, making your loan go further.
3. Compare lenders across the market, including ones who only liaise with brokers, and find you one willing to offer more than 4.5 times a salary and more amenable rates.

How lenders will calculate affordability

While you might do some calculations and determine you can afford a mortgage of £350,000, a lender might have different ideas. They have their own affordability criteria and won’t only look at your salary but a range of other indicators to decide how much they think you can afford to borrow. These include:

• More details on your income: Are you self-employed? A business owner? If you’re an employee, how long have you been in the role? Do you get bonuses? These are questions lenders ask to determine how dependable your salary is. None of them necessarily mean you can’t take out a loan of £350,000 but various lenders will view such circumstances differently and may require reassurances in another form if they view you as a risky borrower.
• Your spending habits: If you earn £40,000 a year but spend most of that on paying back debt, gym memberships, shopping trips and holidays then this will be taken into account. Lenders want to know you’re reliable and any spending they consider extravagant will cause concern about your ability to meet ongoing monthly repayments. Prior to applying for any mortgage loan, it’s worth capping any major spending where possible.
• Any debt you may have: Paying back loans of any kind will feed into how much you’ve got left at the end of the month to pay a mortgage so a lender will want to know that, regardless of any outstanding debt, you can still meet the repayments on the £350,000 loan.

[H3]Eligibility factors

The below can have an indirect effect on your borrowing potential by determining the number of deals and lenders that you have access to.

• Your credit history: A good credit history will see you likely getting a lower interest rate, which will affect how much of your monthly repayments are going toward paying off the £350,000 mortgage. If it’s a bad credit history, there are some things you could do to remedy this before applying but a broker would also be able to indicate lenders still open to lending to those with bad credit.
• Age: The older you are, the fewer lenders generally available, although you could still have options as an older borrower, providing you can prove that you’ll be able to pay your mortgage in later life.
• Profession: Some lenders reserve their higher income multiples for people in certain prestigious professions, such as doctors and lawyers.

Get matched with a mortgage expert for your £350,000 mortgage

How much would a £350,000 mortgage cost in your specific circumstance? Is your salary enough to qualify? What would repayments look like? These are all answers an expert broker specialising in this price range of mortgages would be able to answer in more detail. Offering tailored advice, they can then help you find and apply to a lender with rates and terms best suited to your specific situation whether you’re a first time buyer or existing homeowner.

Call 0808 189 0463 or fill out an enquiry form to be matched with a broker able to give you the expert advice you need. An initial consultation is free but advice is available from point of enquiry to point of sale should you require it.