£180,000 Mortgages

It’s natural to have many questions when applying for a mortgage for £180,000. This is a large sum of money, and you want to make sure you complete all aspects of the application correctly and fully understand how it will impact your monthly finances.

This article will answer those questions and explain how applying through a broker could save you money by ensuring you get the best deal.

Can you get a mortgage for £180,000?

Yes, of course. It’s a fairly standard amount offered by most, if not all, mainstream lenders, and in the context of mortgage lending across the UK, it would be below the current national average.

Whether you qualify for a mortgage of this amount will depend, first and foremost, on your annual salary. Most lenders will apply a multiple, typically 4.5 times your income, but sometimes higher, to it and offer you a mortgage based on that.

Try our mortgage affordability calculator below to determine whether you’d qualify for a £180,000 mortgage based on lenders’ standard income multiples.

If you’ve been looking for a mortgage of £180,000, you’ve probably noticed many variables in the mortgage market, and monthly repayments can differ considerably. This is because each lender has their own eligibility criteria and risk profile.

This can seem confusing at first. However, an experienced broker can help you ensure that you get the best rate and term by scouring the entire market for a lender that matches your circumstances.

What are the monthly repayments on a £180,000 mortgage?

Your monthly repayment is based on the interest rate and the length of your loan. Lenders offer their best rates to those borrowers deemed the lowest risk.

Traditionally, mortgages were taken out over 25 years, but this is no longer the only option. Borrowing over a longer term reduces monthly repayments but increases the overall cost of borrowing. Likewise, shorter-term mortgages increase monthly payments, but you pay less overall.

Try our mortgage repayments calculator below to work out what your monthly repayments could look like.

Example repayment calculations

Below are some examples of how the interest rate and term affect monthly repayments on a mortgage of £180,000:

What salary do you need?

Using the traditional rule of thumb (4-4.5 times annual salary), you’d need between £40,000 and £45,000. However, nowadays, no set salary is required for a £180,000 mortgage, as income is only one element of calculating borrowing capacity.

Most UK lenders will indeed lend between 4-4.5 times the combined annual income of all borrowers, but under the right circumstances, this can be up to 6 times salary. So, in reality, it could be more or less than the salary variation quoted above, depending on the lender you use.

Some lenders don’t use income multiples at all and assess applications on a case-by-case basis, whereas others set minimum income requirements for particular lending requirements, such as:

• Interest-only mortgages
• Self-build mortgages
• Buy-to-let mortgages
• Bridging or development finance

How to calculate affordability

Income multiples indicate how much you can borrow, but other factors, such as a low deposit or adverse credit, could cause some lenders to lower their income multiple.

Providers carry out an income and expense assessment to ensure you can afford the monthly payments. Income multiples are only a guide, and it’s important that you are confident you can comfortably afford the repayments.

The table below shows examples of the income multiples required to borrow around £180,000.

How much deposit is needed?

Typically, lenders like you to put down at least 15%, so a £180,000 mortgage would allow you to purchase a property valued at up to £212,000:

• Property price: £212,000
• 15% deposit: £31,800
• Mortgage amount: £180,200

These days, it is not uncommon for people to get approved for a mortgage with a deposit of 5%, which would allow you to buy a property worth £190,000:

• Property price: £190,000
• 5% deposit: £9,500
• Mortgage amount: £180,500

It is possible to borrow with no deposit, but only a handful of lenders offer this, and there are strict eligibility criteria. The bigger your deposit, the more likely a lender will approve your application.

How a broker can help with a £180,000 mortgage

Look at any mortgage comparison site, and you’ll quickly see that even the rates on offer with high street lenders differ significantly. And that’s before you consider the deals with specialist mortgage providers – some of whom you may never have heard of.

As the table above shows, changing the rate or term of a £180,000 mortgage can significantly impact affordability.

A broker can help you cut through the confusion to find the best deal for your circumstances and avoid overpaying. If you contact us, we can arrange for an advisor we work with to contact you immediately for a free, no-obligation chat.

Other factors affecting monthly payments

Other factors that will affect your borrowing capacity and the amount you pay each month include:

• Credit file: Bad credit won’t necessarily prevent you from being approved for a £180,000 mortgage, but could limit your LTV or mean you pay higher rates. Specialist lenders are often your best option as they have a more flexible approach to assessing applications.
• Deposit: If a low deposit makes a £180,000 mortgage unaffordable, consider asking a family member to stand as guarantor. Alternatively, saving a few more months to get into a lower LTV band could allow you to access lower rates and borrow the amount you need.
• Loan term: If you need £180,000 to secure your dream home, extending the term to make your monthly payments more affordable could be the solution. When your fixed rate ends and you have equity, speak to your broker about reducing the term when remortgaging to cut the overall cost of borrowing.
• Age: Most lenders have an age cap of 75, which can limit the loan term, and therefore the monthly payments, for older borrowers. Some providers cap the borrowing age at 85, so with the right lender, you could borrow £180,000 over a longer term and keep repayments manageable.
• Type of mortgage: The type of mortgage can affect your monthly payments, too:
  • Interest-only mortgages generally require a higher deposit but lower monthly payments. To qualify, you will need a viable repayment vehicle.
  • A variable or tracker rate fluctuates in line with the Bank of England base rate, so your monthly payments can go up or down.
  • A capped rate means you benefit from interest rate decreases, but your rate has a maximum ceiling.

Alternatives

If a £180,000 mortgage is proving too much of a stretch, don’t worry. Finding a property that is £5,000 to £10,000 cheaper could mean you drop an LTV band and can still afford to buy.

Example repayments on a £170,000 mortgage.

Get matched with a broker to secure your £180k mortgage

Trying to second-guess which lenders will accept your application for the mortgage you need can be time-consuming and result in a line of rejections that can adversely impact your credit file.

Our broker matching service will assess your circumstances and then find a broker specialising in helping people in your situation immediately identify the right lender.

Handpicking the best broker for your needs only takes a few minutes. Call 0330 822 0505 or enquire online to arrange a free, no-obligation chat.