£900 Per Month Mortgages

In March 2022, the average monthly rent for a property in the UK (excluding Great London) was £910. If you currently spend this much on rent, you might be wondering what kind of home you could afford if you spent it on a mortgage instead.

While there’s no one-size-fits-all answer to that question, we can provide a few examples of £900-a-month mortgages. We’ll also explain the other factors your lender will consider before they decide how much you can borrow.

We’ll discuss…

How much mortgage can you get for £900 a month?

With a typical residential mortgage, you could likely buy a property for around £200,000. For example, if you have a 5% (£10,000) deposit and choose a capital repayment home loan with a term of 25 years, at the time of writing, the monthly payments would be between £800 and £900, based on typical interest rates.

However, that’s just the simple answer. If you change any of the factors involved, the repayments will change. For example:

• If you increase your mortgage term to 40 years instead of the usual 25, the monthly payments could drop to between £550 and £650.
• If you were to secure a lower interest rate, you payments would drop

One thing to bear in mind, though: maximum mortgage borrowing is not based on the amount you have budgeted for your monthly payments. It’s actually based on income multiples. Use our mortgage affordability calculator below to find out how much you could potentially borrow based on the salary multiples that lenders typically use.

Here are a few examples of mortgages you could potentially get for £900 a month, with property value and deposit amount factored in.

Factors that affect your mortgage rate

A lower mortgage rate means lower monthly repayments. Here are some of the factors that affect the rate you’re offered:

Deposit size

As you can see in the chart above, the rates available to you fall a little each time you step up your deposit amount. Typical interest rates for 95% mortgages are quite a lot higher than for 80% mortgages.

Rate type

When you choose your mortgage, you’ll choose either a fixed rate (meaning your payments will stay the same for a certain period) or a variable rate (meaning your payments could go up or down if interest rates change). Fixed rates are usually set a little higher than the current variable rate.

Credit history

If you have a high credit score, you’ll usually be eligible for better rates than someone with bad credit. If there are events on your credit report such as defaults, county court judgements, or bankruptcy, you might need a bad credit mortgage with a higher rate.

Repayment method

Mortgages are available with two types of repayment method:

• Capital repayment: which means that you repay the loan with interest month by month
• Interest-only: which means you pay the interest each month, while the loan capital is only due for repayment at the end of the mortgage term

Capital repayment mortgages are by far the more common choice for buyers of property they intend to live in, while interest-only mortgages (which have much higher rates) are popular with buy-to-let buyers.

How a broker can help with a £900 per month mortgage

If you want to get a mortgage with repayments of around £900 and you’d like to borrow as much as possible, there are three main ways a broker can help you:

• They understand all the factors involved in mortgage rates and repayments and so can balance them to get you closer to the borrowing amount you need
• They have access to every deal on the market (including ones you couldn’t find on your own) and can tell you which ones someone of your age, employment status, and income could qualify for
• They can look at your finances and provide advice that’s tailored to you, based on your income, savings, etc.

If you get in touch, we’ll arrange for a broker we work with to contact you straight away for a free, initial, no obligation chat.

Other factors in getting mortgage approval

While you may be sure that you can afford monthly payments of £900, that’s not the only factor in how much you can borrow and whether you’ll be approved. Each lender has its own criteria for approval. They will look at your:

Employment type and status

Your employment status and type of income can add to the complexity of applying for a mortgage. For example, if you’re self-employed or you make most of your income through discretionary bonuses, lenders may be more cautious about the deals they offer you.

Certain professionals, such as doctors and lawyers, can often gain access to higher income multiples, such as 5 times salary and even 6 times salary.

Age

Some lenders have a limit on how old you can be at the end of the mortgage term, which can be upwards of 70. That means that if you’re over 30, you may be declined for 40-year mortgages, though you could still get a mortgage for a shorter term, which would have higher monthly repayments.

Getting matched with a broker experienced in standard mortgages

As we’ve shown above, one person’s £900-a-month mortgage can be very different from another’s. The amount you have to spend monthly is only a small part of the picture lenders look at. Your deposit size, credit history, income, and employment status are all important too as these can have an indirect affect on your maximum borrowing.

So, it’s smart to work with a broker with experience in finding the exact type of mortgage you need (whether that’s a small deposit mortgage, a bad credit mortgage, a self-employed mortgage, or anything else).

To find the broker that’s just right for you, try our free broker-matching service. We’ll ask what you’re looking for and then connect you with one of the many experts we work with for a free, no-obligation chat. To use the service, just call 0808 189 0463 or make an enquiry online.