What it really costs
each month
| Year | Paid | Interest | Capital | Balance |
|---|---|---|---|---|
| 1 | £0 | £0 | £0 | £0 |
| 2 | £0 | £0 | £0 | £0 |
| 3 | £0 | £0 | £0 | £0 |
| 4 | £0 | £0 | £0 | £0 |
| 5 | £0 | £0 | £0 | £0 |
| 6 | £0 | £0 | £0 | £0 |
| 7 | £0 | £0 | £0 | £0 |
| 8 | £0 | £0 | £0 | £0 |
| 9 | £0 | £0 | £0 | £0 |
| 10 | £0 | £0 | £0 | £0 |
| 11 | £0 | £0 | £0 | £0 |
| 12 | £0 | £0 | £0 | £0 |
| 13 | £0 | £0 | £0 | £0 |
| 14 | £0 | £0 | £0 | £0 |
| 15 | £0 | £0 | £0 | £0 |
| 16 | £0 | £0 | £0 | £0 |
| 17 | £0 | £0 | £0 | £0 |
| 18 | £0 | £0 | £0 | £0 |
| 19 | £0 | £0 | £0 | £0 |
| 20 | £0 | £0 | £0 | £0 |
| 21 | £0 | £0 | £0 | £0 |
| 22 | £0 | £0 | £0 | £0 |
| 23 | £0 | £0 | £0 | £0 |
| 24 | £0 | £0 | £0 | £0 |
| 25 | £0 | £0 | £0 | £0 |
| 26 | £0 | £0 | £0 | £0 |
| 27 | £0 | £0 | £0 | £0 |
| 28 | £0 | £0 | £0 | £0 |
| 29 | £0 | £0 | £0 | £0 |
| 30 | £0 | £0 | £0 | £0 |
| 31 | £0 | £0 | £0 | £0 |
| 32 | £0 | £0 | £0 | £0 |
| 33 | £0 | £0 | £0 | £0 |
| 34 | £0 | £0 | £0 | £0 |
| 35 | £0 | £0 | £0 | £0 |
| 36 | £0 | £0 | £0 | £0 |
| 37 | £0 | £0 | £0 | £0 |
| 38 | £0 | £0 | £0 | £0 |
| 39 | £0 | £0 | £0 | £0 |
| 40 | £0 | £0 | £0 | £0 |
What the number quietly assumes
Repayment, not interest-only
The figure assumes a capital repayment mortgage. An interest-only deal looks cheaper each month and leaves the whole loan outstanding at the end.
One rate for the whole term
Almost nobody holds one rate for 25 years. The sensible test is whether the payment still works two or three points higher.
Stamp duty sits outside this
So do legal fees, survey and moving costs. On a purchase at this level they routinely add up to more than a year of payments.
Lenders do their own sums
Affordability models differ by lender and move with the base rate. Treat this as the shape of the thing, not a decision in principle.
What people ask
before they borrow
If yours is not here, our broker will answer it on a ten-minute call. No obligation, and no product pitch at the end of it.
Most lenders cap it near four and a half times income, but the real number depends on your outgoings, credit commitments and how the deposit is funded. A broker can tell you inside a day, rather than after a rejection.
Rates step down at 90%, 85%, 80%, 75% and 60% loan to value. Crossing from 76% to 75% can be worth several thousand pounds over a fix, so it is worth checking before you commit the extra.
A two-year fix costs less and puts you back in the market sooner. A five-year fix costs more and buys certainty. The question is not which rate is lower today, but which one you could still afford if rates moved against you.
Stamp duty, legal fees, survey, broker fee and moving costs. On a London purchase they routinely add up to more than a year of payments, and none of them can be added to the mortgage.
Most fixed deals allow 10% of the balance each year without penalty. Overpaying early is disproportionately effective, because in the first years almost all of the payment is interest rather than capital.
Two to six weeks, and it varies more by lender than by borrower. We work backwards from the date the transaction needs the money, and hold a rate as insurance while the search continues.
