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What Mortgage Value Can I Get for £500 a Month?

Are you trying to find an affordable mortgage within a £500 a month budget? Our expert advice will showcase the necessary salary levels and eligibility requirements to secure a mortgage at the right level.

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Almas Uddin
Almas Uddin

Founder and Mortgage Advisor

Almas Uddin2023-05-09
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What Mortgage Value Can I Get for £500 a Month?

Trying to understand what sort of mortgage you can get for your budget is a tricky process. Without knowing what kind of interest rates you'd be offered, it's almost impossible to calculate what any mortgage size would cost per month - and often this depends on multiple criteria.

In this guide, the Revolution Brokers team has summarised what sort of factors will impact your monthly mortgage cost, and what you might be able to borrow for a budget of £500 per month.

For tailored advice or to start your mortgage application, get in touch with our friendly consultants at 0330 304 3040, or email us at [email protected].

What Mortgage Can I Borrow on a Budget of £500 Per Month?

The exact amount you can borrow will vary between lenders, and rely on lots of different assessments.

As an indication, if you had, say, a 20% deposit and have £500 a month to spend, you could borrow around £75,000 to £120,000 depending on what interest rates you are eligible for.

To illustrate this, if you borrow £112,000 over a standard 25-year term and are offered a rate of 2.5% interest, you'd be paying £502.45 per month on a repayment mortgage.

If that were an interest-only mortgage, the same borrowing would cost £233.33 in interest.

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How Can I Calculate what Mortgage I Can Afford at £500 a Month?

Every lender has different affordability criteria, so it is vital to use an experienced broker who can recommend the lenders we know will accept your application.

The total you can borrow depends on factors such as:

  • Employment - what sort of employment you have, and whether it is permanent.
  • Income - how much you earn, and any other earnings outside of a regular salary.
  • Loan to Value - how much you wish to borrow as a proportion of the property's cost.

What are the Eligibility Criteria on £500 a Month Mortgages?

Again, the criteria depend on the lender and their policies. Each provider would consider things, including:

  • Your age - if you are retired or approaching retirement, a specialist lender is usually the best option.
  • Net disposable income and any other debts you have.
  • Credit score - clean credit history is a less risky bet, and if you have an adverse credit history, it may be advisable to seek out a niche bad credit lender.

How Long a Mortgage Term Should I Apply for on a £500 a Month Loan?

The typical UK residential mortgage runs for 25 years - but this can be shorter or longer.

If your mortgage is too expensive per month, but you need to borrow a specific value, then stretching out the term to say, 30 or 35 years might make it affordable, although you will pay more interest over a longer-term.

What are the Average Interest Rates on a Mortgage at £500 a Month?

It isn't straightforward to estimate interest rates since these are unique to each application. Published rates might only apply to applicants who meet every eligibility criteria perfectly, and you could be quoted significantly different rates from two lenders.

The higher a deposit you can offer, the less risk attached to the loan and the lower the interest rates you're liked to be quoted.

Other circumstances also impact the interest charge, including bad credit and properties that aren't standard construction.

Help with Finding a £500 a Month Mortgage

The best way to find tailored lending that fits in with your budget is to consult an independent broker with access to the whole of the UK lending market.

Mortgage brokers have years of experience negotiating lending for a wide range of clients and are here to help. Give us a ring on 0330 304 3040, or email on [email protected] to arrange a good time to discuss.

Almas Uddin
Almas Uddin

Founder and Mortgage Advisor

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As specialist mortgage brokers for a huge variety of applicants, the whole-of-market consultants at Revolution provide access to an exceptional range of lenders, products and mortgage deals. That means you get the advantage of professional negotiation and broker-exclusives through an established lending network to ensure we always find you the most competitive mortgage available.

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FCA disclaimer

The content included in our articles, blogs, web pages and news publications is based on information accurate at the time of writing. Note that policies and criteria can change regularly throughout the UK mortgage lending market, and it remains essential to contact the consultation team to receive up to date guidance. The information included on the Revolution Brokers site is not bespoke to any circumstances or individual application scenarios and therefore is not intended to be used as financial advice. The content we share is designed to be informative and helpful but cannot be relied upon to provide individual advice relevant to your mortgage requirements. All Revolution team members are fully qualified, trained and experienced to provide mortgage advice of an independent nature.

We collaborate with lenders and providers who are regulated, authorised and registered with the Financial Conduct Authority (FCA). Should you require specific mortgage borrowing types, some products such as buy to let mortgages may not be FCA regulated. The Revolution team can provide further information about regulated and unregulated lending as required. Please remember that a mortgage is a debt which is secured against your home or property. Your home can be at risk of repossession if you do not keep up with the repayments or encounter any other difficulties in managing your mortgage borrowing responsibly. This also applies to any remortgage or home loan secured against your property, including equity release products.

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