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Guidance To Securing a £250,000 UK Mortgage

Need a mortgage worth £250,000 and unclear about how to get started or what income you need to earn? Read on for everything you need to know to craft a successful mortgage application!

Almas Uddin
Almas Uddin

Founder and Mortgage Advisor

Almas Uddin2024-07-17
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Steps to Secure a £250,000 UK Mortgage

If you're looking for a mortgage of £250,000, you'll want to know what the repayments will look like, and what criteria will determine the chance of your approval.

Here we'll run through the key things you need to know about securing a £250,000 mortgage, and what factors a lender will need to assess.

For tailored support with finding your ideal mortgage, give us a call on 0330 304 3040, or email the team at [email protected].

How Important is my Income in my £250,000 Mortgage Application?

Your income is vital since a lender needs to know what you earn to establish whether they think you will be able to keep up with the mortgage repayments.

Income, debts and outgoings are used to calculate affordability and your debt to income ratio. If you have a low ratio, you will be considered creditworthy and have more competitive terms.

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Why Do Lenders Have Different £250,000 Mortgage Income Requirements?

Every lender has its own policies, and some will offer up to four or 4.5 times your annual income, whereas others will offer five or even six times.

You can also consider different borrowing forms, such as a secured loan where you can borrow as high as ten times your salary.

What Salary Do I Need to Be Approved for a £250,000 Mortgage?

It really depends. If you are applying with a partner and have a joint income of £85,000, you could qualify for around £255,000 in mortgage borrowing based on your earnings times three.

Say you are applying individually, and earn £45,000, you might find it more challenging since you'd need a lender to offer six times your income to borrow £250,000.

The below table illustrates how different lenders might view different salaries and the maximum mortgage value they might offer depending on what income multiples are available.

Salary

Lender A - 3 x Income

Lender B - 4 x Income

Lender C - 5 x Income

Lender D - 6 x Income

£45,000

£135,000

£180,000

£225,000

£270,000

£50,000

£150,000

£200,000

£250,000

£300,000

£55,000

£165,000

£220,000

£275,000

£330,000

£60,000

£180,000

£240,000

£300,000

£360,000

£65,000

£195,000

£260,000

£325,000

£390,000

£70,000

£210,000

£280,000

£350,000

£420,000

£75,000

£225,000

£300,000

£375,000

£450,000

£80,000

£240,000

£320,000

£400,000

£480,000

£85,000

£255,000

£340,000

£425,000

£510,000

What Does a £250,000 Mortgage Cost Per Month?

Mortgages can vary significantly in terms of what interest rate is charged and how many years they run for.

Therefore, there isn't a fixed amount that a £250,000 mortgage will cost, since it depends on those factors.

The below tables show several £250,000 mortgage scenarios, and how the monthly costs would change depending on the mortgage terms and the rates.

Monthly Costs on a £250,000 Mortgage at 1% Interest

Mortgage Value

15 years

20 years

25 years

30 years

£250,000

£1,496.24

£1,149.74

£942.18

£804.10

£255,000

£1,526.16

£1,172.73

£961.02

£820.18

£260,000

£1,556.09

£1,195.73

£979.87

£836.26

£265,000

£1,586.01

£1,218.72

£998.71

£852.34

£270,000

£1,615.94

£1,241.71

£1,017.56

£868.43

£275,000

£1,645.86

£1,264.71

£1,036.40

£884.51

£280,000

£1,675.78

£1,287.70

£1,055.24

£900.59

£285,000

£1,705.71

£1,310.70

£1,074.09

£916.67

£290,000

£1,735.63

£1,333.69

£1,092.93

£932.75

£300,000

£1,765.56

£1,356.69

£1,111.77

£948.84

Monthly Costs on a £250,000 Mortgage at 4% Interest

Mortgage Value

15 years

20 years

25 years

30 years

£250,000

£1,849.22

£1,514,95

£1,319.59

£1,193.54

£255,000

£1,886.20

£1,545.25

£1,345.98

£1,217.41

£260,000

£1,923.19

£1,575.55

£1,372.38

£1,241.28

£265,000

£1,960.17

£1,605.85

£1,398.77

£1,265.15

£270,000

£1,997.16

£1,636.15

£1,425.16

£1,289.02

£275,000

£2,034.14

£1,666.45

£1,451.55

£1,312.89

£280,000

£2,071.13

£1,696.74

£1,477.94

£1,336.76

£285,000

£2,108.11

£1,727.04

£1,504.33

£1,360.63

£290,000

£2,145.09

£1,757.34

£1,530.73

£1,384.50

£300,000

£2,182.08

£1,787.64

£1,557.12

£1,408.38

What Will Impact my £250,000 Mortgage Application Aside from Income?

Lenders will look at lots of different factors before approving an application:

  • Loan to Value - the larger deposit you can provide, the less risky the application and the better rates you can expect. Most lenders will offer up to 85% LTV, so you'll need a 15% deposit. There are mortgages available at 90% or even 95%, but these are less common.
  • Employment - your profession and the type of employment can also make a difference. If you are self-employed or a contractor, for example, stricter assessments may apply to ensure you can afford the loan.
  • Credit rating - if you have a bad credit history, some lenders will refuse your application outright, whereas others can accept it but might offer less competitive rates.
  • Age - some lenders put a maximum cap on an applicant's age, whereas others have no limit, so it's essential to apply to the right lender if you are nearing retirement age, or already retired.

Can I Get a £250,000 Mortgage on a Buy to Let?

Potentially yes - the lender will usually need a deposit of at least 25% and calculate the rental income expected to be comfortable that it will cover the interest costs.

Are £250,000 Mortgages Available on Second Homes?

Yes, you can apply for a second home mortgage of any value but need to have enough equity in your property to act as adequate security.

The deposit on second home mortgages is usually higher, and you'll be assessed more rigorously in terms of affordability to make sure you can afford the loan, as well as the repayments on your first property.

Can I Apply for a £250,000 Mortgage on an Unusual Property?

You can - although some lenders steer clear of non-standard homes, such as high rise buildings or houses with a thatched roof.

Specialist lenders can usually help and have experience in lending against unique homes.

Expert Help with Affordability on a £250,000 Mortgage

If you're unsure whether you will be eligible, have already been rejected for a mortgage, or just want to get an idea about the best rates on the market, give us a call.

Business loan broker is independent and whole-of-market, so can negotiate any mortgage product that we think is best suited to your needs. Call us on 0330 304 3040, or email us on [email protected].

Almas Uddin
Almas Uddin

Founder and Mortgage Advisor

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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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