£300 Per Month Mortgages

Monthly mortgage repayments can vary enormously, depending on the size of your deposit, the value of the property you’re buying, the term of the loan, and the type of mortgage you have.

In this article we’ll be looking specifically at how much you can borrow if you’ve set yourself a budget of £300 per month and how a broker can help secure the lending you need by helping to find the right lenders for your circumstances.

What can you borrow for £300 per month?

With a monthly budget of £300, the approximate amount you can borrow should be between £50,000-£100,000. The exact amount will vary depending on the size of loan you need, your interest rate, and the length of your mortgage term:

• The more you borrow, the more your repayments will be.
• The higher the interest, the higher your payments.
• The longer the term, the lower your payments.

These factors work together, not in isolation. So, for example you could borrow more money but over a longer term in order to hit your monthly repayment target. Here are some examples, using different variables, of what £300 mortgage repayments per month could look like:

These are examples only, correct at the time of writing, and they’re based on certain assumptions – for example, that there are no red flags in your credit history. You can find out more below about the factors that lenders will take into account when deciding whether to lend you a mortgage that you can pay off at £300 per month. Any rates cited are purely for example purposes and may not be representative of the current market conditions.

If you have a set mortgage amount or term that you’re aiming for, take a look at our repayment calculator here:

Affordability

Setting yourself a monthly budget for your mortgage repayments – whether for £300 or any other amount – is a good place to start. However, the key factors that will determine how much you can borrow will be your income and outgoings. Your age may also be a factor, as there are only so many lenders that will allow for borrowing into later life.

The way lenders will assess your affordability is by first looking at your annual income and applying a multiple of that as the basis for the amount they could be willing to lend to you for a mortgage.

You can see how this may work out by inputting your current annual salary into our mortgage affordability calculator below:

Eligibility

To get your mortgage payments as low as £300 per month, you need a low interest rate or a long mortgage term – ideally both.

So what will lenders consider when they’re deciding to lend you a mortgage that meets those conditions? Each lender is different, and will apply their own criteria. But there are some things that all lenders will take into account:

How much deposit you have

Your deposit will almost always need to be equal to 5% of the property price at the very least (more usually 10%) to get any mortgage at all. The more you can save for a deposit, the more favourable interest rates you’ll access (see below) – and the less you’ll have to borrow, which will keep your repayments down too.

The cost of the property, and how much you want to borrow

You might have noticed the term ‘loan to value’ above – that simply means the proportion of the property price that you need to borrow. The lower your loan to value, the lower your mortgage repayments are likely to be.

Your credit history

The better your credit score, the more choice you will have when it comes to choosing a lender – and the more favourable mortgage terms you’ll be offered.

If you’ve had bad credit in the past, it’s still possible to get the mortgage you need. There are lots of specialist lenders who can cater for such situations and an experienced broker will be able to help you find them.

Your income and outgoings

All lenders will want to know you can afford to make repayments on your mortgage – and some will set a minimum level for the income you’ll need to be offered a mortgage at all. Some lenders treat certain kinds of income differently, such as benefit payments or bonuses and commission.

If you’re employed, you’ll usually need to show evidence of recent payslips (last 3 months). If you’re self-employed you’ll be asked to present your most recent certified accounts (up to last 3 years).

How rates will vary depending on your deposit

The table below highlights some examples of how your deposit can affect the interest rates you’ll pay on a mortgage, and therefore how much you’ll have to repay each month. Let’s assume you’re buying a £150,000 property over 40 years with a repayment mortgage.

In these examples, it’s only when the deposit is 25% or more that the monthly mortgage payments start to get down to below the £300 per month mark. The rates cited are purely for example purposes and may not be representative of the deals currently available.

How a broker can help lower your monthly repayments

As you can see, a £300 per month mortgage is a delicate balance of mortgage size, interest rate and mortgage term – and getting one requires the right income, deposit, property and credit score.

Finding a mortgage that ticks all of these boxes can be difficult – and applying to the wrong lender could have a knock-on effect for your credit score as the lender’s search will show up on your record when applying elsewhere.

An expert mortgage broker can help you avoid all this hassle. We offer a matching service designed to find you a broker with knowledge and experience based on your specific circumstances.

So, if you want to keep your mortgage payments low but can’t afford a huge deposit, they’ll help you consider all of your options. If you get in touch we’ll arrange for a broker we work with to contact you straight away for a free, no obligation, initial chat.

Types of mortgages available

The two most common types of mortgages available are capital repayment and interest-only. With a repayment mortgage, every month you pay off the interest and some of the capital you borrowed. This means you pay less interest overall through the life of the mortgage.

With an interest-only mortgage you’re only paying off the interest each month. This means your monthly payment will usually be considerably lower than it would be with a repayment mortgage – so if your main goal is to make mortgage payments of only £300 per month, you might consider this option.

However, bear in mind, when the interest-only mortgage ends, you’ll have to repay all the capital you borrowed as one lump sum. So, you’ll need some form of approved repayment vehicle to run alongside your interest repayments to be sure you can meet this commitment.

This type of mortgage is often used for buy-to-let properties, as the landlord can invest their rental income and use it to repay the capital at the end of the term.

Find the right broker for your £300 per month budget

Paying £300 per month for your mortgage is certainly possible, but it depends on your circumstances and the property you’re hoping to buy. Different lenders offer different interest rates and deals which will affect your repayment level.

To navigate this, you’ll need a mortgage broker with expertise in helping borrowers just like you. Give us a call on 0808 189 0463 or make an enquiry and we’ll match you with the right expert who can deal with this type of situation for a free initial chat.