The monthly repayment amount on a £200,000 mortgage depends primarily on your mortgage type, term length and interest rates.
A longer-term loan will translate to smaller monthly payments but more outstanding overall interest.
Again, if you’re taking an interest-only mortgage, you’ll need to repay only the interest component each month, while the principal amount can be repaid at the end of the term.
In this article, we’ll talk about what kind of monthly repayment amount you can expect for a 200K mortgage, the salary needed for a 200K mortgage, and other related topics. So, stick around till the end.
Table of Contents
How Much Is A 200k Mortgage Per Month?
At the time of writing this article, the average monthly repayments on a £200K mortgage are around £1,198.
This assumes current interest rates of around 5.25% (Bank of England base rate as of August 2024), a mortgage term of 25 years, and a capital repayment mortgage type.
The below £200k mortgage repayment table shows the monthly repayments based on different interest rates and mortgage duration (remember this is on a capital repayment mortgage).
| Interest rate | 15 years | 20 years | 25 years | 30 years |
| 3% | £1381 | £1109 | £948 | £843 |
| 4% | £1479 | £1212 | £1055 | £954 |
| 5% | £1582 | £1320 | £1170 | £1074 |
| 6% | £1,688 | £1,433 | £1,289 | £1,199 |
| 7% | £1,798 | £1,551 | £1,414 | £1,331 |
| 8% | £1,911 | £1,673 | £1,544 | £1,468 |
Note: For the above example, we’ve assumed the interest rate stays fixed for the entire length of the mortgage.
However, if you take a longer-term mortgage, your repayments will reduce in the short term.
As already mentioned, this will mean greater interest repayment in the long term. The decision of the length of term depends on your present financial condition.
To get a better idea of the exact monthly repayments for your mortgage, you can use our mortgage repayment calculator.
Mortgage Repayment Calculator
Salary Needed For A £200K Mortgage
The amount of money you can borrow will depend on your salary, and most lenders usually lend around 4 to 4.5 times your annual income.
Going by that, to be approved for a £200K loan, you’ll need a yearly income of around £50,000. Keep in mind that this is above the average UK salary at present.
You can opt for a joint mortgage if your solitary earnings are insufficient to approve a £200K mortgage. Here, the combined earnings of all joint mortgage holders are used to calculate the loan amount.
Lenders might offer as high as 5 to 6 times the annual income for some professionals, such as doctors or lawyers. This is simply because these professions are seen as more lucrative and stable.
If you find it challenging to secure the mortgage amount you need, you can speak with an expert mortgage broker who can guide you.
Deposit Requirements for A £200K Mortgage
Currently, the minimum deposit requirement for residential mortgages is between 5-10% of the property value.
So, if you’re buying a property with a £200K value, you can expect a deposit amount of around £10,000-£20,000, and your mortgage would be between £190,000-£180,000.
You might also be able to secure a £200K mortgage with zero deposit, but this is an extremley rare scenario.
In case you have a poor credit score or are looking to buy a non-standard construction property, the lender might ask for a higher deposit of around 25%.
Also, the pool of lenders you can approach will reduce considerably in such cases.
For a buy-to-let mortgage, you’ll need a deposit of 20% at minimum. We recommend putting down a larger deposit if you can, as this will lower your monthly repayments and also give you lower interest rates.
Interest-Only Vs Capital Repayment Mortgages
We’ve already mentioned that apart from interest rate and loan term, the factor which determines your monthly repayments the most is the mortgage type.
Here, type essentially means whether you’ve taken an interest-only mortgage, or a capital repayment one.
Capital repayment mortgages are ones in which you pay back a portion of the capital borrowed and the interest every month.
This ensures that both your interest and capital components get paid off eventually. Naturally, the monthly repayments for these mortgage types will be high.
Interest-only mortgages are ones in which you pay only the interest every month, and the capital is repaid at the end of the loan term.
This ensures lower monthly payments but might cost more since you’re not repaying anything of the capital throughout the loan term.
For example, if you’ve taken a £200K loan at a 5.5% interest rate and a term length of 25 years, your monthly repayment amount would be £917 for an interest-only mortgage, while for a capital repayment mortgage, it will be £1,289 monthly.
Frequently Asked Questions (FAQs)
1. Is overpaying allowed with a £200K mortgage?
Yes, you can overpay on a £200K mortgage so that the loan is repaid faster and you can save on interest. Most lenders will allow you to pay around 10% of the mortgage balance as an overpayment.
If you want to overpay more than this limit, you could be looking at early prepayment charges. Please look at the mortgage terms and conditions before applying because this is not the case with every mortgage.
2. Why should I hire a mortgage broker?
A mortgage broker can help you with the entire mortgage application process, offer expert-tailored advice, and find the best deals in the market suitable for you.
Our goal is simple - to provide most up-to-date and accurate mortgage information to make your mortgage journey as stress-free as possible. Have a question? Fill up the quick form and one of our mortgage advisor will connect with you.
