Updated: April 19, 2023
£1,500 Per Month Mortgages
Wondering what sort of mortgage you can get for £1,500 per month? Find out all the answers, as well as how to make your money go further, in our guide!
Author: Pete Mugleston - Mortgage Expert, MD
Updated: May 10, 2022
If you’re looking to buy a home, you probably have a figure in your head that you’d be comfortable spending on your monthly mortgage repayments. Whilst it might seem like a simple question, what size of mortgage you could get with that budget has no straightforward answer.
In this article, we’ll look at how much you could potentially borrow with a budget of £1500 per month. We’ll also explain the factors that can influence the loan you’re offered, and how using a broker can help you make the most of your budget.
The following topics are covered below...
What size mortgage can you get for £1,500 per month
How far your monthly budget of £1,500 can stretch will depend on two key variables, namely the term of the loan and the lender’s interest rate.
The below tables demonstrate how much the term length and interest rates of your mortgage could affect the total amount you could end up repaying on a typical repayment mortgage. We’ve also provided examples using a slightly higher, and slightly lower budget, for comparison. All figures are rounded to the nearest thousand.
*Interest rates are for representation only and will vary from lender to lender*
Interest rates* | 20-year term | 25-year term | 30-year term |
2% | 294,000 | 351,000 | 403,000 |
2.5% | 281,000 | 332,000 | 377,000 |
3% | 268,000 | 313,000 | 353,000 |
£1600 per month budget
Interest rates* | 20-year term | 25-year term | 30-year term |
2% | 316,000 | 377,000 | 433,000 |
2.5% | 302,000 | 357,000 | 405,000 |
3% | 288,000 | 337,000 | 380,000 |
£1400 per month budget
Interest rates* | 20-year term | 25-year term | 30-year term |
2% | 279,000 | 330,000 | 379,000 |
2.5% | 264,000 | 312,000 | 354,000 |
3% | 252,000 | 295,000 | 332,000 |
It should be stressed, however, that the key factors that will determine how much you can borrow for a mortgage will be your annual income and regular outgoings – these alone will be what lenders will focus upon when conducting their affordability assessments, rather than your monthly budget.
Rather than approaching lenders directly, the smart way to establish where the best mortgage offers may lie for your budget is to first seek the help of an experienced mortgage broker.
Armed with your budget, they’ll be able to identify who the best lenders are and whether there are any exclusive offers available that currently fit your target repayment amount.
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Factors that influence your £1500 per month repayments
Once you’ve established that mortgage lenders would consider your expendable budget to be £1500 per month, and you’ve met the relevant criteria, there are still a number of factors that can affect how far your budget will stretch in terms of the overall mortgage figure you could obtain:
- Mortgage term – The overall amount you could possibly repay at £1500 per month over 10 years is significantly less than how much you could possibly repay over 30 years of equal monthly payments.
- Interest rates – All mortgages incur interest, and this will need to be factored into your affordability. If £1500 is your total budget, an element of this will need to be spent on interest repayment, depending on the type of mortgage you have.
The majority of mortgages have an initial fixed-rate period at a lower interest rate, so you may need to remortgage once this period ends, in order to maintain the most efficient use of your repayments.
- Mortgage type – Most residential mortgages are repayment products, which means that each monthly payment you make contributes to paying down an element of the actual capital you borrowed and the interest accrued that month.
Interest-only mortgages are rarely used for residential purchases, but they are commonly used for buy-to-let and commercial properties. As you only repay the interest with your monthly repayments with this type of mortgage, the size of mortgage you could achieve with a £1500 monthly repayment will be much larger. Bear in mind that you will need a suitable repayment vehicle in place, however, as you will still owe the entire loan amount at the end of the term.
- Your lender – Each lender has their own criteria and interest rates. Both how the loan figure is calculated, and how interest rates are decided on by each lender are determined by your individual circumstances. This means that it’s perfectly possible for different lenders to offer you entirely different interest rates and/or loan amounts, depending on how they apply their criteria to your circumstances.
How a broker can help
Speaking to a mortgage broker ahead of your application will help you to get a better idea of which mortgage lenders would make the best use of your available budget (or affordability), based on your individual circumstances. They could even obtain an agreement in principle, which will help you to focus your property search on homes within your budget.
If you’re a less traditional borrower, for example, you’re self-employed, older, have a small deposit, or poor credit rating, there are brokers specialising in all of those circumstances who can help you. As well as securing you the most appropriate deal for your needs and circumstances, they can take some of the administrative burden out of the application process. This could be liaising with solicitors on your behalf, or even negotiating with estate agents.
The brokers we work with have extensive knowledge of the many different lenders on the market, and their individual lending criteria, as well as how they will apply them to your specific circumstances. Get in touch to find out more.
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Eligibility criteria
Whilst it’s a great idea to set a budget, it’s important to understand you don’t have full control over this figure. You might consider yourself to have an available budget of £1500 per month, but lenders may not.
As well as using your post-tax income, a lender would factor in your current outgoings, as well as the other costs of owning a home, which means that you would actually need to be taking home much more than £1500 per month in order for them to consider that amount as your available budget.
All lenders apply slightly different calculations when it comes to working out how much you could borrow, but typically the starting point is between 4 and 6 times your annual salary, depending on your circumstances.
If you input your own annual salary into our mortgage affordability calculator below, you’ll be able to see how this works out for you.
Mortgage Affordability Calculator
Our affordability calculator can tell you how much you can potentially borrow from a mortgage lender. Simply enter your total household income below and our calculator will do the rest.
You could borrow up to
Most lenders would consider letting you borrow
This is based on 4.5 times your household income, the standard calculation used by the majority of mortgage providers. To borrow more than this, you will need to use a mortgage broker to access specialist lenders.
Some lenders would consider letting you borrow
This is based on 5 times your household income, a salary multiple you might struggle to qualify for without the help of a broker. This income multiple is not widely available to customers who are applying directly with a lender.
A minority of lenders would consider letting you borrow
This is based on 6 times your household income, a salary multiple you will struggle to get without a broker. Six-times salary mortgages are usually only available under very specific circumstances.
Get Started with an expert broker to find out exactly how much you could borrow.
Below are the most prominent factors that lenders will use to assess you against their criteria:
Affordability/Income
There are many variables here that could affect the size of your loan. Some lenders have a minimum income requirement for certain mortgage types, others may not include certain elements of your pay in their calculations, depending on your employment type and/or industry.
Most importantly, you’ll need to prove that you’re able to afford £1500 per month repayments alongside your existing commitments.
Employment type
Most lenders assess self-employed income differently from employed income, as they consider it to be riskier. You may also need to have been in your current role for longer if you’re self-employed, as opposed to an employed person in a similar occupation.
This effectively means that a self-employed person and an employed person with the exact same salary could be offered different sized mortgages by the same lender. Mortgage brokers that specialise in self-employed mortgages will be able to advise you about which lenders will view your income more favourably, if applicable.
Deposit Size
The amount of deposit you have can indirectly impact how much you can borrow. First of all, to put it simply – the higher deposit you have, the less you will NEED to borrow. So, if you’re putting down a 20% deposit, you’ll only need to borrow 80% of the property value.
Providing a larger deposit will attract more lenders to your application and, subsequently, increase the availability of more competitive interest rates, which could also allow your monthly payments to stretch further.
Your age
Older borrowers won’t be able to extend their mortgage term as far as younger borrowers can, as most lenders have a maximum age by which you must have repaid the mortgage. For a typical lender, this is around 75 years of age, meaning a 25-year-old applicant potentially has 50 years to repay their mortgage, whereas a 40-year-old applicant only has 35 years to repay that lender.
Credit history
Your credit history can affect the mortgage you’re offered in a few ways. A low credit score can mean:
- The loan to value offered may be lower
- Lenders may also use a lower multiple of your income to calculate your affordability
- Less competitive interest rates are available to you
If you have credit issues, there are bad credit mortgages available, as well as brokers that specialise in adverse credit advice.
Type of property
If the property you plan to buy is seen as higher risk, for example, it’s of non-standard construction, this can also affect the number of lenders who can deal with your request, and, as a result, the deposit you need along with the interest rate you may be offered.
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Speak to an expert broker
As each lender has their own criteria, choosing which one to approach in order to achieve the greatest benefit from your £1500 per month budget can be a minefield. The experienced brokers we work with can tailor their help to your specific goals. If that goal is obtaining the highest loan amount for your budget, they’ll look at those lenders who will look at your income more favourably, or perhaps have a higher maximum age threshold, depending on your circumstances.
We offer a free broker-matching service, which pairs you with the mortgage expert that has the most relevant experience to your homeownership goals. Initial consultations are always free, and you’ll be under no obligation after that. Call now on 0808 189 0463 or complete this form, and we’ll be in touch immediately to begin the process.
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We know everyone's circumstances are different, that's why we work with mortgage brokers who are experts in all different mortgage subjects. Ask us a question and we'll get the best expert to help.
Pete Mugleston
Mortgage Expert, MD
About the author
Pete, an expert in all things mortgages, cut his teeth right in the middle of the credit crunch. With plenty of people needing help and few mortgage providers lending, Pete found great success in going the extra mile to find mortgages for people whom many others considered lost causes. The experience he gained, coupled with his love of helping people reach their goals, led him to establish Online Mortgage Advisor, with one clear vision – to help as many customers as possible get the right advice, regardless of need or background.
Pete’s presence in the industry as the ‘go-to’ for specialist finance continues to grow, and he is regularly cited in and writes for both local and national press, as well as trade publications, with a regular column in Mortgage Introducer and being the exclusive mortgage expert for LOVEMoney. Pete also writes for OMA of course!
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