Getting a £150,000 Mortgage

With the current level of UK house prices, obtaining a £150,000 mortgage is a popular figure to aim for and an achievable sum for those looking to borrow money and buy a home.

This guide covers everything you need to know about getting a £150k mortgage. You’ll learn about the monthly costs, how much you’d need to earn, and all the other factors that can affect repayments on a mortgage of this size.

Keep reading for all the essential details or click on a link below to jump straight to a specific section…

How much do you need to earn to get a £150,000 mortgage?

This will be based on a variety of factors, however, as a rough estimate (see the table below) you’d likely need an annual income somewhere between £35,000-£40,000.

Most lenders use income multiples to establish what you can borrow, and others use additional methods based on your personal circumstances. So, how much you’d need to earn to get a £150,000 mortgage will come down to the lender you’re dealing with.

Try our mortgage affordability calculator below to work out whether your income will qualify you for a mortgage of this amount.

If you speak with the right lenders who can best serve your income situation, then the amount you’d need to earn to qualify could be less than you may assume. For example, standard salary multiples range from 3 to 4.5 times your annual income. But, a few lenders will go even higher, up to 5 times or even 6 times in some cases.

Example calculations

Based purely on salary multiples, here’s some examples of how much your total income (either as joint applicants or sole) would need to be in order to afford a £150,000:

As you can see, for the lower income multiples, you’d need to earn a larger household salary in order to qualify for a £150,000 mortgage. But, by using a higher multiple, it’s much easier to reach your desired borrowing limit.

It’s important to remember that your salary isn’t the only thing that is taken into consideration by some lenders. Lenders will also take a deep dive into how much money you spend on fixed outgoings and existing credit commitments.

As long as you deal with the right lender for your circumstances, you can greatly boost your chances of getting a £150k mortgage, even if you’re in one of the lower salary brackets.

Monthly repayment cost for a £150,000 mortgage

Enter this mortgage amount into our mortgage repayments calculator below to get an idea of how your monthly payments could look.

Example repayment calculations

Whilst specific circumstances will always play a part, to give you a better idea of the rough costs you can expect to pay, here are some examples based on a £150,000 mortgage with a 3.5% interest rate:

Do keep in mind that there are plenty of individual variables that factor into the calculations when working out your monthly repayment figures (see further down in this article for more information).

How a broker can help

Each lender has their own way of calculating how much they’ll let you borrow. So, if you’ve got your heart set on a mortgage of around £150,000, it’s important that you speak with the lenders who’ll be able to arrange this in the best way, based on your personal income and circumstances.

Speaking with an expert broker means they’ll be able to look at your finances and then introduce you to the lenders who’ll let you borrow your desired sum. Not only this, experienced brokers also have an existing network of relationships, which allows them to get you the best deal possible for your £150k mortgage.

So, if you’re interested in exploring lower monthly repayments, just make an enquiry. We’ll introduce you to an expert advisor for a free, no obligation, initial discussion.

How much deposit you need for a £150k mortgage

The larger the deposit you can use, the lower the loan to value (LTV) ratio. This reduces the risk for lenders and can result in better mortgage terms and rates. The maximum LTV most lenders will offer is 95%, so a deposit of at least 5% of the property’s value is needed.

But some will have limits much lower than this – potentially meaning you need to put down a bigger deposit for a £150k mortgage.

Other factors that impact the cost of your mortgage

Here are the key areas, in addition to those mentioned above, that can play a role in determining how much you can borrow, and what your £150,000 mortgage will cost per month.

The below are eligibility factors which may have an indirect impact on your total borrowing by determining the number of lenders and deals available to you.

• Size of your deposit: Increasing the size of your deposit lowers your loan-to-value (LTV) ratio. With a lower LTV, some lenders will let you use higher income multiples, and/or offer better rates.
• Term length: how long your mortgage is for can make a big difference to the monthly repayment cost on a £150,000 loan. A longer term can mean smaller payments, but it means paying a bigger sum overall throughout the life of the loan.
• Your credit score: this can make a significant impact on your approachable lenders and rates. It’s worth downloading all your credit reports to see where you stand. Ideally, you should get a skilled advisor to help you evaluate and make improvements. Don’t worry if you’ve low scores or had previous rejections, some lenders are happy to deal with bad credit applicants.
• Source of income: whether your income is from a PAYE salary or if you’re self-employed will affect your affordability assessment.
• Additional income: if you work overtime or receive bonuses/commissions, it’s important you deal with lenders willing to accept all your income. Similarly, if you do any extra freelance work or have part-time work, all of this can help supplement your application and boost your affordability.
• Type of property: the construction and type of property can change the structure of your loan. Some lenders won’t be comfortable with non-standard constructions and may offer you more expensive rates as a result. However, certain lenders specialise in niche property types.
• Fixed or variable rate: choosing a fixed or variable rate of interest will partly determine your monthly cost. Fixed rates tend to mean slightly higher rates than variable interest. But, a fixed rate means locking in a rate for a certain period.
• Repayment or interest-only: an interest-only mortgage will mean lower monthly payments, but you won’t be paying back any of the principal. However, you might want to explore part and part mortgages.
• Residential or buy-to-let (BTL): lenders will offer you different rates and terms if the purpose of the property is a buy-to-let for you to rent out as an investment.
• Your age: this will play a part, especially if you are an older borrower, but these days there are mortgage options available no matter what age you are, as long as you can provide that you can afford your mortgage payments after retirement.

Speak to a mortgage expert

Getting a £150,000 mortgage is an achievable goal. But, in order to reach it in the easiest way possible – you should speak with an expert mortgage broker.

We offer a free broker-matching service. This means we’ll quickly assess your income and personal circumstances, then pair you up with a skilled advisor who’ll be able to arrange the best deal for your situation.

Just call 0808 189 0463 or make an enquiry. We’ll set up a free, no obligation chat between you and an experienced broker who’ll be able to get you your ideal mortgage solution.