What is the monthly repayment on a £50,000 mortgage?
If you’re looking for a £50,000 mortgage, your monthly repayments will vary.
This payment will differ based on interest rates, the deposit and the length of your mortgage term, as seen below.
These figures should only be treated as a guide and not mortgage advice. Figures are based on a repayment mortgage, not an interest only mortgage and calculated with Money Advice Service's mortgage calculator.
Lenders generally offer mortgages to those who can provide a minimum deposit of 10%. However, some lenders will accept a deposit as low as 5%, equating to £2,500, while others may prefer a 15% deposit, totalling £7,500.
Many other factors will affect your eligibility for a mortgage, including your credit history or employment history, so be sure to take these into account when you speak to your mortgage adviser.
Whether or not you can afford a £50,000 mortgage will depend on many factors, including the initial deposit. For example, you should calculate your monthly salary, take into account any other regular outgoings that you have and compare this to the monthly payments, bearing in mind mortgage terms and interest rates. The availability of a mortgage may also depend on your credit history. If you have other outstanding credit, such as credit cards, store cards, loans, finance, car leases, or a history of late payments or bad debts you may not be offered as many options for a mortgage.
Some lenders may be reluctant to offer a mortgage to those who are self-employed. This is because salary is one of the biggest determiners for your eligibility. If you are self-employed and cannot demonstrate that you earn enough annually to cover your repayments, you may struggle.
The good news is, it’s not impossible. You’ll need to show your lender between one to three years of accounts to prove you have sufficient profit and income from your business and demonstrate your ability to come up with the deposit. If you've sent your Self-Assessment tax return to HMRC for the past 4 years Tax Overviews or a SA302 should be sufficient. You can also show them work records, for example details of upcoming projects or retained accounts.
Luckily, a £50,000 mortgage is a relatively small amount to borrow, so you may not have to show your business is making huge profits, assuming your business trades successfully throughout the year and year on year profits are stable, or increasing.
Salaries are one of the biggest deciders for mortgage lenders. Typically, lenders are willing to offer three or more times your household’s yearly income, sometimes up to four, but this could be reduced if you have other outstanding debts and dependents. However, it is always advisable to put down a higher deposit, particularly on a low borrowing amount such as £50,000. This will increase your Loan-to-Value ratio and may give you more choice and more flexible mortgage deals. Mortgage Advice Bureau advisers can guide you on the right product for your monthly income.
Many buy-to-let mortgages are interest-only, and come with their own specific terms. Namely, you must already own another property, and you should be prepared to pay a 25% deposit. Therefore, while you can apply for this type of mortgage at £50,000, there may be more costs in the short-term, plus longer-term higher interest rates.
An interest-only mortgage requires you to pay off the value of your loan once the term of interest payments has come to an end. Over the term of the mortgage, you only repay the interest of the loan. No capital is repaid unless you make over payments. You will be required to pay off the balance on expiry of the term.
Many buy-to-let mortgages are interest-only, so you may be able to use any saved income from rent payments to cover this final sum.
Specialist mortgage advisers will search over 90 approved lenders, to secure the right deal for your £50,000 mortgage. Answer some mortgage related questions and an adviser will give you a call to discuss your options. Or you can visit your nearest building society branch.
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