How much is monthly payment on 200 000 mortgage

If you want to borrow £200,000 to purchase a property, read our guide to see what your repayments could be.

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If you want to buy a property that requires a £200,000 mortgage, you’ll likely want to know how much that will cost you each month.

In this article, we look into what this level of borrowing will cost on a monthly basis as well as the factors that affect repayments. We identify how you could potentially minimise your borrowing costs in addition to other fees you should factor into your property purchase.

What are you looking for?

How much does a £200,000 mortgage cost per month?

There is no one set amount a mortgage of this size costs but as a broad example, for a standard capital and repayment mortgage, over 25 years, using an interest rate of 3% the repayments would be £948 per month.

Remember, at this stage, you can only guess which rates and term length will be available to you. It’s best to speak to a broker if you’re looking for a more specific answer based on your individual circumstances.

Calculate your monthly repayments

If you are looking to borrow £200,000, use our calculator to see how much that may cost you per month:

Mortgage Repayment Calculator

Our mortgage repayment calculator can tell you how much your mortgage will cost you each month and overall. Enter the amount you’re borrowing, the term length and interest rate, and our calculator will do the rest.

Loan Amount

Enter the amount you're borrowing

Mortgage Rate

2.5% is an average figure but the rate you get may vary

Mortgage Term

25 years is average, but most lenders offer longer and shorter terms

This is an interest only mortgage

Total amount paid at end of term:

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How a broker can help you reduce your repayments

All mortgage applicants want to minimise their monthly repayments, particularly ones that want to borrow at a relatively high level such as £200k. To do so, you need to apply to a lender that will give you the lowest interest rate possible.

This is why using a broker can be such a good idea. The brokers we work with have in-depth knowledge and experience of the market which means their help can quickly pinpoint the right lender for you. They’ll know which provider will offer a mortgage with the cheapest repayment plan you can secure.

If you get in touch we’ll arrange for a mortgage specialist to contact you straight away.

Repayments on mortgages can be impacted by the following factors, both directly and indirectly:

Interest rate

The higher the interest rate set on a mortgage, the higher the monthly cost to you because you are paying more interest on the outstanding balance. That’s why the interest rate is such an important factor to try to minimise so that the overall cost of your mortgage is cheaper.

As you’ll see in the table below, a 25 year repayment mortgage at 2% works out at £848 per month, but at 3% you’ll pay an extra £100 per month more.

Term length

If you think that the monthly repayments on your potential £200k may be too much, one way you can reduce them is to see if you can extend the term of the mortgage. However, it will mean that you end up paying more interest over the entire life of the mortgage than you would with a shorter term.

Traditionally mortgages are 25 years in length, but lenders may go up to 30, 35 or even 40 years in some circumstances. Again, using the table below, a 25 year term at 3% interest rate works out at £948 per month, but if you choose a 30 year term this reduces your payments to £843 per month.

Mortgage type

The type of mortgage you secure can impact how your interest is calculated.

Here are some common mortgages:

• Fixed: A fixed rate mortgage means you have a set interest rate over a pre-agreed period of time. In practice, that means your monthly repayments stay the same over that timescale. At the end of the fixed term, you can negotiate a new fixed rate or you can revert to the standard variable rate.
• Tracker: Tracker mortgages, unlike fixed rate mortgages, change in line with the Bank of England base rate – which can go up or down.
• Interest only: Interest only mortgages only require you to pay the interest charged each month. As a result, the monthly repayments are much lower as you are not repaying the principal as well. However, you need a repayment plan in place to settle the loan – in full – at the end of the mortgage term.

Deposit

The larger your deposit when borrowing £200k, the better your loan-to-value ratio. When your LTV is better, you will have more choice of providers offering their lower rates. With a lower rate, comes a lower monthly repayment.

Your credit history

If you’ve had bad credit in the past, you may find that you have less providers offering you a rate which is affordable to you. Providers see you as a slightly higher risk so you may have to accept a higher rate than you had wanted. As a result, your monthly mortgage costs could go up.

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Example calculations

The impact of term length and interest rate can be seen below in the potential monthly repayments on a £200k mortgage.

*For the purpose of this table we are assuming the interest rate stays the same for the full length of the mortgage. Interest rates can change, if you decide to remortgage on to a different rate or move from either a fixed or discounted deal on to the lender’s standard variable rate (SVR).

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Other costs to factor in

It’s not just the monthly repayment that you need to budget for when applying for a mortgage.

The following costs are important to factor in to your calculations:

Mortgage costs

These fees and charges usually come as standard as a result of securing a £200,000 mortgage through a lender:

• Arrangement fee: If you have a fixed rate mortgage, you may find that you have to pay another one of these fees if you negotiate a new mortgage at the end of your term.

• Valuation fee: Lenders may likely want to value your potential property to ensure that it is worth what you are paying.

• Early repayment charges: If you want to overpay each month or pay off your mortgage before the term ends, you may be subject to these charges. They often are charged on the overpayment value and can be anywhere between 1-5% on top.

Property purchase costs

You will need to pay these fees when purchasing a property in addition to any mortgage costs you incur:

• Solicitors fees: If you need a mortgage, you will need to instruct a solicitor to act on behalf of your legal interests.
• Stamp duty: This is the tax that each property purchase, above a set amount, is subject to. There is a tiered structure in how it is calculated – the higher the purchase price, the higher the percentage you are charged. For a £200,000 mortgage, it’s most likely your stamp duty surcharge will be at least 2% of the property value.

There will be a number of fees to pay upfront too, which you can find more information on in our article about mortgage fees you should expect.

Get matched with the right broker for a £200,000 mortgage

Different lenders have varying approaches to how they evaluate an application. When it comes to securing a £200k mortgage, you’ll want to approach the lender whose evaluation results in offering you the full amount with the lowest rate around.

Talking with a broker can maximise your chances of finding that lender – and fast. We offer a no-obligation broker matching service which is free to use. We can put you in touch with an advisor who can help save you time and money – not to mention stress by guiding you through the application process.

Call us today on 0808 189 2301 or make an enquiry so we can put you in touch with the right expert for you.

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We know everyone's circumstances are different, that's why we work with mortgage brokers who are experts in all different mortgage subjects.

Ask us a question and we'll get the best expert to help.

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About the author

Pete, an expert in all things mortgages, cut his teeth right in the middle of the credit crunch. With plenty of people needing help and few mortgage providers lending, Pete found great success in going the extra mile to find mortgages for people whom many others considered lost causes. The experience he gained, coupled with his love of helping people reach their goals, led him to establish Online Mortgage Advisor, with one clear vision – to help as many customers as possible get the right advice, regardless of need or background.

Pete’s presence in the industry as the ‘go-to’ for specialist finance continues to grow, and he is regularly cited in and writes for both local and national press, as well as trade publications, with a regular column in Mortgage Introducer and being the exclusive mortgage expert for LOVEMoney. Pete also writes for OMA of course!

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Pete Mugleston

Mortgage Advisor, MD

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*Based on our research, the content contained in this article is accurate as of the most recent time of writing. Lender criteria and policies change regularly so speak to one of the advisors we work with to confirm the most accurate up to date information. The information on the site is not tailored advice to each individual reader, and as such does not constitute financial advice. All advisors working with us are fully qualified to provide mortgage advice and work only for firms who are authorised and regulated by the Financial Conduct Authority. They will offer any advice specific to you and your needs.

Some types of buy to let mortgages are not regulated by the FCA. Think carefully before securing other debts against your home. As a mortgage is secured against your home, it may be repossessed if you do not keep up with repayments on your mortgage. Equity released from your home will also be secured against it.