Updated: April 17, 2024
Getting A Mortgage For £400-£500 a Month
Trying to work to a budget of £400-£500 per month for your mortgage? It can be done! Find out exactly what your next steps need to be in our in-depth guide.
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According to Lloyds Bank, the average UK mortgage payment in 2021 was £753, but don’t worry, if your budget is in the region of £400-£500 there are still plenty of options.
In this article, we’ll look at what factors influence the size of mortgage you’re offered, examples of what you could get with your budget, and how a broker can help you make the most of your options.
What size mortgage can you get for £400-£500 per month?
As there’s so many factors that can influence the mortgage you’re offered it’s difficult to give one definitive answer to this question. In fact, mortgage lender is usually based primarily on a multiple of your income, rather than an amount you have budgeted for monthly payments.
Obtaining an agreement in principle before you start looking for a property will be particularly helpful if you’re on a fairly tight budget.
Whatever your budget, a mortgage broker will be able to recommend ways to make the most of your target amount, helping your search to find a suitable property.
In order to demonstrate how much you may be able to borrow for a mortgage within this budget range, each of the below examples assumes that:
- You take a standard repayment mortgage
- The mortgage term is 25 years
- The interest rate is 2.5%
- You have provided a 10% deposit
Monthly repayments of approximately £400 – could get you around £75,000
Monthly repayments of approximately £450 – could get you around £82,000
Monthly repayments of approximately £500 – could get you around £91,000
Aside from the assumptions we’ve made above, your own personal circumstances also affect how much you can borrow, so these figures are for demonstration purposes only.
Calculate your maximum borrowing
Try out mortgage affordability calculator below to work out how much you could borrow based on the typical income multiples that mortgage lenders use.
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.
Get Started with a Broker
Maximise your chance of approval with specialist advice from a mortgage expert.
How interest rates and terms impact your repayments
These tables demonstrate how much your mortgage payments might vary depending on the term length and interest rate. These examples have been tailored to borrowers who have budgeted between £400 and £500 per month for their monthly repayments.
£400 per month
| Term | 2.5% | 3% | 4% |
| 15 years | £55,000 | £53,000 | £50,000 |
| 20 years | £65,000 | £63,000 | £57,000 |
| 30 years | £79,000 | £74,000 | £67,000 |
£450 per month
| Term | 2.5% | 3% | 4% |
| 15 years | £62,000 | £60,000 | £56,000 |
| 20 years | £73,000 | £70,000 | £65,000 |
| 30 years | £89,000 | £84,000 | £75,000 |
£500 per month
| Term | 2.5% | 3% | 4% |
| 15 years | £68,000 | £66,000 | £62,000 |
| 20 years | £81,000 | £78,000 | £72,000 |
| 30 years | £98,000 | £93,000 | £84,000 |
*Interest rates vary from lender to lender and could be higher or lower than shown in the table. Typical rates are purely for example purposes and may not be representative of what is currently available on the market.
How a broker can help
As you can see, there are a great number of factors that can affect how much you could potentially borrow and what your repayments could be, regardless of your budget. Whether you’re looking to pay £400 or £500 per month, a mortgage broker will be able to look at your full circumstances alongside the entire market of lenders and products available, in order to maximise the level of borrowing you can get with your budget.
We work with a large network of expert mortgage brokers, many of whom specialise in certain niches within the mortgage market. For example, if you’re concerned about getting a mortgage because you’re self-employed, slightly older, or even have bad credit, we’ll be able to match you with a specialist adviser that will be able to help you find a suitable lender for your circumstances.
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Criteria affecting how much you can borrow
Lenders typically use a multiple of around 4.5 times your annual income to determine the mortgage loan, but this can vary (lower or higher) based on any of the below circumstances, which largely fall into two categories:
Direct impact
These factors directly impact the maximum amount you can borrow
- Income: The more you earn, the maximum you could potentially borrow and some lenders use higher income multiples than others – up to x6 salary under the right circumstances. There are also lenders who will allow you to declare supplemental earnings, such as bonuses, benefits and freelance work.
- Outgoings: This includes fixed outgoings and existing credit commitments. There’s no set amount of outgoings that lenders across the board consider too high, but this will be factored into your affordability assessment and offset against your income.
Indirect impact
The below can have an indirect impact on your maximum borrowing by limiting or increasing the number of lenders and deals that you qualify for.
- Property type: Some lenders might decline you if they consider the property to be of non-standard construction, i.e thatched cottages
- Your employment status: Some lenders assess self-employed income less favourably than employed income, which could indirectly affect the amount offered
- How much deposit you have: Although some lenders accept as low as 5% minimum deposit, providing more than that will increase the number of deals you qualify for by reducing the LTV (Loan to Value)
- Your credit status: Having a poor credit score can affect how many lenders you have access to, but there may be specialist bad credit lenders that can help
- Your age: As well as age impacting the maximum term of your loan, some lenders will reduce their borrowing to older applicants if their income is impacted by retirement during the loan term
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How to make the most of your budget
The more you earn, the more you can borrow but your mortgage eligibility also impacts this by affecting the range of deals you qualify for. With that being said, the cost of property in the UK continues to rise, and it may still be difficult to buy the home of your dreams with a budget of £400-£500 per month.
The good news is, there are a range of home ownership schemes that you could use to increase the options available to you.
The First Homes Scheme
With this scheme key workers and first time buyers can get properties for at least 30% (and up to 50%) less than the local market value. You could, therefore, potentially buy a home valued at £100,000* with £70,000 or less, making it much more achievable with a budget of £400-£500 per month.
Whilst developments are only available in certain parts of England at the moment, the number of first homes properties is expected to increase significantly in the coming years. More information can be found on the government’s official website.
*Please note actual house prices will vary depending on type and location.
The Shared Ownership Scheme
This scheme allows applicants with a smaller budget to purchase a percentage of their home (between 10-75%) in order to get a more expensive property than the mortgage they’re able to obtain.
Ownership of the property can be increased in increments as little as 1% at a time until you own the whole property if you wish. Remember to factor in that you’ll pay rent to the housing association that owns the remaining share of your home. More information about the Shared Ownership scheme can be found in our standalone guide.
Get matched with an expert in lower mortgages
The brokers we work with will consider all of your circumstances and make recommendations on the best mortgage options available to you, whatever your budget. They all offer an initial discussion for free. Find out how their knowledge, experience, and access to specialist products could help to get you the best deal available!
Simply contact us on 0808 189 0463 or via this form, and we’ll match you with one of the expert brokers that we work with straight away.
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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!
Continue Reading
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What To Do If You Can’t Afford A Mortgage
Getting A Mortgage For £400-£500 a Month
£250k Mortgages: How Much You Need To Earn & Monthly Costs
Mortgages Based on Three Times Income
Mortgages Based on 4-4.5 Times Salary
Getting a Mortgage 5 – 5.5 Times Your Salary