£70,000 Mortgages: Monthly Repayments and Eligibility Requirements

If you’re considering taking out a £70,000 mortgage, whether for a first-time purchase, downsizing, or buying a smaller property, understanding the potential monthly costs is essential.

The amount you’ll pay each month can vary depending on factors like the mortgage term, the interest rate, and the type of deal you choose.

In this article, we’ll look at example repayment scenarios, explain what can affect your eligibility, and show you how to find the best mortgage deal for your circumstances.

How much would the monthly payments cost for a £70,000 mortgage?

Mortgage rates fluctuate constantly, given changes in the Bank of England base rate and lenders’ discretion. For a 25-year mortgage of £70,000 with a two-year fixed rate and 2.5% interest rate, the monthly repayments would initially be £314.

However, any of the following factors can increase or decrease your repayments:

Mortgage term

The most common repayment term for a mortgage is 25 years, but it can be anything up to 40 years. Repaying over 40 years means you pay less each month, but much more interest.

Alternatively, repaying over less than 25 years will mean that you pay back more each month in your mortgage payment, but potentially pay a lot less interest overall over the life of the mortgage. This might be an attractive option for a relatively small mortgage of £70,000.

The table below shows approximately how much you would repay for a £70,000 mortgage over different terms (bear in mind that the rate is likely to change over the lifetime of the mortgage).

As you can see, you could save nearly £20,000 in total by repaying over 10 years rather than 25 years. Plus, you could benefit financially from being mortgage-free sooner, as you can save or invest excess income elsewhere.

However, there can also be financial benefits to keeping your monthly mortgage payments lower for longer, so you have more spare cash now. Only a mortgage broker can tell you what’s right for you.

You can also use our repayment calculator to input different terms and interest rates than those used in the table above:

Repayment style

There are two common repayment styles:

• Capital repayment
• Interest-only

Most owner/occupier mortgages are repayment, meaning you pay off the loan capital simultaneously with the interest. The alternative is interest-only mortgages. As the name suggests, these only require you to pay monthly interest. The loan capital is repaid at the end of the term (sometimes by selling the property).

Interest-only mortgages are not a common choice for your primary home but are widely used for buy-to-let properties. There are also specific interest-only mortgages designed for people in retirement, with the intention that no capital repayments will be due in your lifetime, and the loan can be repaid by selling the property after you die.

An interest-only mortgage of £70,000 for a two-year fixed rate would give monthly repayments of £200-300. So, you’d pay around £2,400 to £3,600 per year in interest for the lifetime of the mortgage and repay the £70,000 loan amount at the end from a pre-arranged repayment vehicle such as a savings plan or other investments.

Mortgage rate type

There are two common mortgage rate types:

• Fixed
• Variable

With a fixed-rate mortgage, your rate is fixed for the first two, three, or five years (the period is up to you), meaning that your monthly payments will stay the same for that period. With a variable-rate mortgage, the rate changes if interest rates change, so your monthly payments could increase or decrease along with market movements.

A fixed-rate mortgage typically starts with a higher rate than a variable-rate mortgage. Further, a five-year fixed-rate mortgage will have a higher rate than a two-year one. You’re paying more for the peace of mind that your payments won’t change.

The table below shows how your rate type will affect your monthly payments if other factors remain the same. Each shows a 25-year capital repayment mortgage for £70,000.

Deposit size

The amount of deposit you’ll need to get a £70,000 mortgage will depend mainly on the property’s price. Most lenders expect you to put at least 10% of its value down, while others will be happy with a 5% deposit under the right circumstances.

Having a large deposit will usually help you secure a lower rate. So, for example, if you’re moving home or remortgaging and have equity of £70,000 in your property, it’s possible to get a mortgage for another £70,000 with a two-year fixed rate of under 2.00%.

Credit history

A poor credit history will limit your choice of lenders, and you may not be accepted by those who offer the best rates. You should prepare to pay a little more and, perhaps, plan to remortgage in a few years when your credit problems are behind you.

Mortgage Affordability

In addition to all the above factors, it’s also important to understand the impact of lenders’ affordability assessments. You may believe you have sufficient monthly income to cover repayments for a £70,000 mortgage, but lenders will want to determine that for themselves.

Initially, they do this by examining your annual earnings and applying a multiple of that, typically 4-4.5 times annual income, but it can be five or even six times in certain circumstances.

Our mortgage affordability calculator below will give you a better idea of how this could look for you based on your annual earnings:

How a broker can help with a £70,000 mortgage

As you can see, there are a lot of factors that influence your monthly payments. There are also some good reasons why lower repayments are not necessarily better for you in the long run. With the level of complexity involved in this decision, it’s wise to speak to a specialist before committing to a contract. A broker can help you:

• Reduce your monthly repayments, if that’s your priority
• Increase your payments to repay less in total, if that’s your priority
• Feel confident that you’ve made the right choice for your circumstances
• Avoid paying more than you need to

Who can get a £70,000 mortgage?

These days, a £70,000 mortgage is rarely enough to buy your first home. It’s far more likely that you’d need a mortgage of this size because:

• You have a large deposit to put down
• You’re moving home, and there is a difference of £70,000 between the cost of your new home and the amount of equity you hold in your current home
• You’re remortgaging your current home to find a better mortgage deal
• You own your own home and need to free up £70,000 in capital
• You’re buying a share in a Shared Ownership property
• You’re buying a fixer-upper property and have a plan in place to renovate it

In most of these situations, getting approval for a £70,000 mortgage shouldn’t be a problem. Since most lenders will lend you between four and five times your income, you would only need an annual income of over £14,000. The challenge is borrowing this amount as cheaply as possible.

Cost of a £75,000 mortgage

Having seen the figures for repayments on a £70,000 mortgage, you might be interested to see what changes if you borrow slightly more. This could help you make a higher offer on a home you hope to buy or spend more money on home improvements.

Let’s again take the example of a two-year, fixed-rate mortgage (as this is a popular choice). The monthly payments on a £75,000 mortgage over 25 years will be upwards of £360.

The following table shows how much they might be over shorter mortgage terms, starting from 10 years.

Get matched with a mortgage broker

It’s worth speaking to an expert before applying for a mortgage in the region of £70,000. The amount you can save over the term of the mortgage is often far more than the cost of their service. Plus, you can arrange an initial, no-obligation chat for free.

Our free broker-matching service is designed to help you find a broker with the exact experience you want. So, whether you’re moving home, remortgaging or raising equity on your current home, or buying through a Shared Ownership scheme, we’ll match you with someone who can help. To get started, make an enquiry online or call 0330 822 0505.