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Mortgage Advisor & Director
There’s a lot to think about if you’re planning to apply for a £500,000 mortgage. This is a substantial mortgage amount and a big financial commitment, so it pays to be prepared and do some calculations before you get started.
In this guide, you will learn how to work out the monthly repayments on a £500k mortgage, what factors determine them, and what we can do to help.
What are the average repayments on a £500k mortgage?
The average repayments on a £500,000 mortgage at the time of writing (November 2024) are roughly £2,639 and £791,755 over the whole of the term. This is based on a capital repayment mortgage agreement with an interest rate of 4% and a term length of 25 years.
These figures are based on what is typical in the market right now, but your exact repayments will depend on what kind of rate you qualify for and the type of mortgage you choose.
Work out your monthly repayments
You can get an idea of how different term lengths and rates might affect your mortgage by using our calculator below and entering different values for these variables.
This calculator shows capital and repayment results by default, but you can convert them into interest-only by toggling the switch.
After you have run your calculations, you can source your own mortgage rate and deal through Teito and we have expert brokers on hand to offer support - get started here.
Factors that affect the repayments on a £500k mortgage
Your exact repayments will depend on your interest rate, term length and the type of mortgage you choose. In this section, we take a closer look at how these factors can affect the repayments on a £500k mortgage with example calculations to add context.
Term length
You could take out a mortgage with a longer or shorter term length than the standard 25 years. Longer agreements come with lower monthly repayments, but stretching the debt out over a lengthier period means paying more interest instalments and more overall.
The table below shows how different term lengths affect the repayments on a £500,000 mortgage, taken on a capital repayment basis with an interest rate of 4%.
Mortgage Amount | Term Length | Monthly Repayments | Overall Repayment |
| £500k | 10 years | £5,062 | £607,471 |
£500k | 15 years | £3,698 | £665,719 |
£500k | 20 years | £3,030 | £727,176 |
£500k | 25 years | £2,639 | £791,755 |
£500k | 30 years | £2,387 | £859,348 |
£500k | 35 years | £2,214 | £929,827 |
£500k | 40 years | £2,090 | £1,003,052 |
Interest rate
The interest rate you qualify for will be determined by the level of risk the lender is taking on, based on factors including your deposit amount and credit history.
The table below shows how different interest rates can impact the monthly cost of a £500,000 mortgage taken on a capital repayment basis over the standard 25 years.
Mortgage Amount | Interest Rate | Monthly Repayments | Overall Repayment |
£500k | 3.5% | £2,503 | £750,935 |
£500k | 4% | £2,639 | £791,755 |
£500k | 4.5% | £2,779 | £833,749 |
£500k | 5% | £2,923 | £876,885 |
£500k | 5.5% | £3,070 | £921,131 |
£500k | 6% | £3,222 | £966,452 |
Mortgage type
The product and repayment type of your mortgage will also play a role in determining what your repayments are. The most common repayment type in the UK is capital repayment where you would repay the debt plus interest each month plus interest over the agreed term.
The main alternative are interest-only mortgages, which only require you to pay the interest each month, and settle the debt itself using a pre-agreed repayment vehicle at the end of term.
See the table below for examples of the repayments on a £500,000 interest-only mortgage with various different interest rates, taken out over a term of 25 years.
Mortgage Amount | Interest Rate | Interest-only Payments (Monthly) | Overall Repayment |
£500k | 3.5% | £1,458 | £937,500 |
£500k | 4% | £1,667 | £1,000,000 |
£500k | 4.5% | £1,875 | £1,062,500 |
£500k | 5% | £2,083 | £1,125,000 |
£500k | 5.5% | £2,292 | £1,187,500 |
£500k | 6% | £2,500 | £1,250,000 |
Your mortgage’s product type will also determine how interest is charged and therefore your monthly cost. The most common types in the UK are fixed rate - which come with consistent monthly interest chargers during an introductory rates period before reverting onto the lender’s more expensive standard variable rate (SVR) - and tracker rate, which can have fluctuating interest due to being tied to an external marker, such as the Bank of England’s base rate.
Comparing repayments on similar mortgage amounts
As £500,000 will be an approximate mortgage amount for some borrowers, the table below shows how your repayments would change if you were to borrow slightly more or less than this, with an example interest rate of 4% and a 25 year term on capital repayment.
Mortgage Amount | Monthly Repayments | Overall Repayments |
£475k | £2,507 | £752,167 |
£500k | £2,639 | £791,755 |
£525k | £2,771 | £831,343 |
£550k | £2,903 | £870,931 |
£575k | £3,035 | £910,519 |
£3,167 | £950,106 |
Calculations all done? Here are your options now...
Other costs to think about
When taking out a £500k mortgage, the monthly repayments aren't the only cost to factor in. The following fees may also apply:
- Product fees: Can range between nothing and £2,000. Fee-free deals often come with higher rates, but the fee itself can sometimes be added to the mortgage.
- Valuation fee: Some lenders will expect you to foot the cost of having the property you’re buying valued, and this can set you back between £250-1,500.
- Legal fees: Can range from a few hundred to several thousand pounds.
- Stamp duty: Payable if you are not a first-time buyer. You can find out exactly how much your bill will be in our stamp duty guide.
- Admin costs: This includes the booking fee, telegraphic transfer fee and the account fee. All in all, admin costs for a mortgage application can cost around £1,000.
How we can help you reduce your mortgage repayments
As £500k is a substantial mortgage amount, exploring ways to potentially reduce your monthly repayments is recommended, and our mortgage brokers can help you do that.
Teito’s expert, whole-of-market mortgage brokers can help you optimise your credit reports to boost your chances of landing a lower interest rate, and advise you on exactly how much deposit you would need to get the best and most affordable deal.
Moreover, you can access the entire market through them and will be offered bespoke advice about which term length and mortgage type to choose based on your circumstances.
What to do after calculating your repayments
Now that you’re run some initial calculations to understand how much your £500k will cost, it’s time to choose the deal that suits your needs, and you can do this for free through Teito.
It takes just seconds to source your rate and minutes to secure an agreement in principle, and we whole-of-market brokers on hand to offer professional advice along the way.
Here are just some of the reasons to choose Teito for your mortgage needs:
- Exclusive rates and deals are available
- We are 5-star rated on leading review websites
- Expert advice from whole-of-market brokers available
- No marks on your credit report
Ready to choose a mortgage and access expert broker support? Get started here to choose your deal and arrange a free, no-obligation chat with an advisor today.
FAQs
Given that most UK mortgage lenders will cap your maximum borrowing at 4.5 times your annual salary, all of the mortgage applicants would need a combined income of roughly £110,000 a year to qualify for a mortgage of £500,000.
If you don’t earn this much, keep in mind that other mortgage providers will stretch to 5-6 times salary under the right circumstances, so you could find options through a broker.
Choosing an Adviser
Selecting a qualified and experienced mortgage adviser is of great importance. To choose a suitable adviser, evaluate their qualifications, experience, and reputation, and ensure they are regulated by the Financial Conduct Authority (FCA).
Read reviews from previous clients and make sure they provide a clear explanation of the products and services they offer, as well as the fees and charges associated with them.