£600 Per Month Mortgages

Having a monthly budget in mind before you begin searching for your new home is very sensible. And if that budget is £600 there are lots of options available to you.

In this article, we’ll look at the different factors that influence how much you can borrow, what size of loan you may be able to achieve, and how a broker can help you to get the best out of your budget.

How much can you borrow for £600 per month?

There’s no set answer to this question, as a number of factors can influence this figure. The examples below would suggest a typical amount of around £134,000 but they are based on a number of assumptions of what you may be able to borrow for on or around this budget.

These examples assume you have:

• Taken out a repayment mortgage at an interest rate of 2.5%
• Opted for a mortgage term of 25 years
• 10% deposit available

A budget of £600 per month for repayments – could get you approximately £134,000

A budget of £650 per month for repayments – could get you approximately £145,000

A budget of £700 per month for repayments – could get you approximately £156,000

These figures are for demonstration purposes only, and we’ll take a look at the factors that can influence them below. It’s recommended you seek out an agreement in principle in order to obtain a closer estimate before making an offer on a property.

Try our mortgage affordability calculator below to get a clearer idea of how much you can borrow based on your income.

How the mortgage term can affect your repayments

The main two factors that influence your mortgage payments are the length of the mortgage term and the interest rate. The below table demonstrates how much of an impact they could have on your borrowing.

For the purposes of this table, we’ve based the calculations on a typical repayment mortgage with monthly repayments of £600.

*Interest rates vary from lender to lender and based on your individual circumstances. These rates are for representation only.

A mortgage broker can help you to select the lender that will offer the most flexibility and largest loan for your needs and circumstances.

How eligibility criteria impacts your mortgage

To decide how much you can borrow, lenders typically use a multiple of your annual income, but the following factors can have an indirect impact on affordability by determining the number of rates and deals you have access to.

This criteria will also have a bearing on the interest rate you end up with.

Employment status

There are a number of factors lenders will consider with regards to your employment, including:

• Whether you’re employed or self-employed
• How long you’ve been in your role/industry
• whether your industry has a structured and stable career path

If you’re newly self-employed, and/or only have minimal experience in your current role/industry, some lenders might not be well equipped to help you or may offer higher interest rates. There are, however, specialist lenders who offer greater flexibility in these areas.

Credit status

Most lenders will perform a credit search, and therefore, your credit score can impact their decision. It’s a good idea to download your credit reports prior to your application so that you know which type of lender will be more suitable. If you have a poor credit record you may have fewer lenders to choose from, but don’t worry, there are specialist bad credit lenders available that may be able to help you.

Age

Most mortgage lenders have a maximum application age, and/or a maximum age by which you must have fully repaid your mortgage. Older borrowers can therefore find it more difficult to access longer mortgage terms, which can limit their borrowing.

How a broker can help with a £600 per month mortgage

When you have a set budget, it can be difficult to know which lender will offer you the best possible mortgage to suit it, and which will look at your personal circumstances most favourably.

A mortgage broker with access to the entire market of lenders can consider your individual circumstances and budget against each lenders’ criteria and maximise how much you could borrow with £600 per month.

Our free broker matching service will put you in touch with the most relevant expert for your needs and circumstances. Just get in touch and we’ll arrange for an advisor to contact you straight away.

How your deposit impacts the interest rates and loan amount

The size of deposit you provide can indirectly influence how much you can borrow, because the more you have to put down, the more lenders and deals you’ll have to choose from.

Furthermore, when a smaller deposit is provided, the interest rates will generally be higher in order to balance out the increased risk. Those with larger deposits are rewarded with better interest rates and, typically, higher income multiples.

Another benefit to offering a larger deposit is that this will reduce the LTV (Loan to Value) of your borrowing. This means that you can purchase a more costly property. For example, assuming you achieved a loan of £134,000, as per the original example, you could potentially purchase a property costing:

• £140,000 with a 5% deposit
• £148,000 with a 10% deposit
• £157,000 with a 15% deposit
• £167,000 with a 20% deposit

*Actual amounts offered could be more or less depending on interest rates and your personal circumstances.

How to make the most of your budget

Although a mortgage broker will be able to help you maximise the size of loan you can obtain with a £600 per month budget, the high cost of buying a home in the UK could still mean that this budget falls short of allowing you to buy a property that suits your needs.

The good news is, there are options available to help those struggling to get onto the housing ladder, or to access the size of loan that they need. If your budget won’t stretch as far as you expected, you could consider one of the following home ownership schemes:

• The Shared Ownership Scheme – helps applicants with a smaller budget to purchase between 10-75% of a property, rather than all of it. This allows them to buy a property that’s more expensive than the mortgage available to them. Rent is paid to a housing association, which owns the remaining share of the property.

• The First Homes Scheme is aimed at key workers and first time buyers. It offers a range of ‘first homes’ eligible properties, which are sold at 30% to 50% below local market value. This is a great way to maximise the type of property available with your £600 budget, however developments are only available in certain parts of England at the current time.

Get matched with a mortgage expert who can work with your budget

We work with a network of expert mortgage brokers, and our free broker-matching service will put you in touch with the one whose knowledge and experience most closely matches your desire to make the most of a set budget.

Contact us today on 0808 189 0463 or via this form, and we’ll match you with a mortgage expert immediately for a free initial chat. You’re under absolutely no obligation, so what do you have to lose?