£1,000-Per-Month Mortgages

If you’ve done the calculations and know you can comfortably afford £1,000 as a monthly mortgage repayment, you’ll likely be able to get a decent-sized mortgage. Exactly how much will depend on various factors, but here you can learn more about what those are, the loan range you could be looking at and how to make your money go further.

What size mortgage can you get for £1,000 per month?

A budget of £1,000 per month equates to a good-sized mortgage. It’s higher than the UK average monthly repayment, which sits at £723, according to 2018 research by Santander. The exact size of a mortgage loan of £1,000 per month will depend on several aspects – some of which can affect the outcome of your application both directly and indirectly, including your deposit and your choice of lender. These factors also help to determine the interest rates available to you and the mortgage term.

The most important thing to remember here is that mortgage affordability is not based on a set amount of income you might have left over each month for mortgage payments. It’s initially based on a multiple of your annual salary, before a more detailed assessment of your income and outgoings is carried out.

Try our mortgage affordability calculator below to get a clearer idea of the amount you could borrow based on the income multiples lenders typically use.

Example calculations

The table below gives an idea of what different rates, terms and deposit sizes can get you with a monthly repayment of £1,000.

While there are numerous online mortgage calculators, it’s advisable to seek expert advice for a tailored consultation. They’ll be able to consider the nuances of your financial situation and share what rate you can expect and the total amount you could borrow.

Flexible monthly affordability

If there’s potential for you to increase that £1,000 to £1,200 or even £1,300 per month mortgage, more mortgage options will open up to you. The table below shows the difference an extra few hundred pounds a month could make.

Factors that affect mortgage eligibility

While it would be a lot easier if lenders simply took your word for how much you can afford to repay around £1,000 per month, the process of obtaining a mortgage of this amount is a little more complex. In fact, since 2008 and the financial crash, almost all lenders have implemented mortgage affordability checks to ascertain your affordability for themselves.

And, of course, no one lender is the same. It could be that one lender believes you can only pay £800 a month while another says £1,200.

Here are the factors they take into consideration:

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

With any mortgage application, calculations are vital in determining what kind of property you can afford and the mortgage you’d need to support it. Once you’ve got a deposit saved and your income is clear, it’s very easy to think you know how much you can afford, but there are many extra costs and factors to consider. A broker understands the market and can:

1. After considering all factors, verify that £1,000 is definitely an amount you can afford. This reduces your risk of rejection, which can affect future applications.
2. Look at the lenders on the market, including specialist ones and those who exclusively work with brokers, and share who will likely lend the highest amount at the lowest interest rate based on your £1,000 budget.
3. Stretch your affordability by offering access to lenders who are open to lending five times your salary or higher.

Mortgage rates today

At the time of writing, interest rates tend to sit between a range of 1.5% and 4.5% and the typical mortgage term is 25 years. Of course, this depends on whether you opt for a fixed or variable rate. The variable rate will mean the rate will fluctuate, potentially eating more into your monthly £1,000. A fixed rate, although likely to be a little higher, will stay the same throughout the term. Most mortgages begin with an initial fixed-rate period.

The less you’re paying in interest, the more of your £1,000 can go toward repaying the mortgage loan. In some cases, a longer mortgage term of 30 or 35 years could also be possible, stretching your money further.

Types of mortgages available

With a budget of £1,000 a month for a residential property, you can opt for an interest-only or capital repayment mortgage. Interest-only means you’d only be paying off the interest each month, leaving the original capital borrowed to be paid at the end of the term.

Consult with a specialist broker

When it comes to something as important as purchasing a property, there’s no sense in risking any miscalculations. If you’ve forgotten to factor something in and instead are eligible to borrow more or less than what you had in mind, it could set you back months. It’s best to get the process right from the start by working with an expert broker who knows your local market and can advise on how to get the best deal with your budget.

The brokers we work with understand how lenders assess individual cases and can accurately determine what you can expect to loan and whom to apply to. Reach out today by calling 0330 822 0505 or making an enquiry for a free, no-obligation consultation with a broker we’ve personally handpicked and vetted for you.