How much does a £500,000 mortgage cost? (Monthly repayments & affordability)

At a glance: what a £500,000 mortgage could cost

A £500,000 mortgage isn’t one fixed monthly payment. Your repayment amount depends mainly on:

Interest rate
Mortgage term (e.g., 25 or 30 years)
Repayment type (repayment vs interest-only)

As a guide, higher rates and shorter terms usually mean higher monthly costs. Longer terms can reduce the monthly payment, but you’ll typically pay more interest overall.

Example monthly repayments for a £500,000 mortgage

Use the table below to see how monthly repayments can change with interest rate and term length for a capital repayment mortgage (where you repay both interest and the loan balance over time).

These are illustrative figures to help you plan. Your actual offer will depend on the specific product, your circumstances, and lender criteria.

Interest rate	15 years	20 years	25 years	30 years	35 years
1%	£2,992	£2,299	£1,884	£1,608	£1,411
2%	£3,218	£2,529	£2,119	£1,848	£1,656
3%	£3,453	£2,773	£2,371	£2,108	£1,924
4%	£3,698	£3,030	£2,639	£2,387	£2,214
5%	£3,954	£3,300	£2,923	£2,684	£2,523
6%	£4,219	£3,582	£3,222	£2,998	£2,851
7%	£4,494	£3,876	£3,534	£3,327	£3,194
8%	£4,778	£4,182	£3,859	£3,669	£3,551

What this means in practice

If you’re comparing options, focus on the total monthly cost and how it changes with the term.
A small difference in interest rate can make a noticeable difference on a mortgage of this size.

Repayment vs interest-only: how the cost can differ

Most homebuyers choose repayment mortgages, but it’s worth understanding the alternative.

Repayment mortgage (capital repayment)

Your monthly payment includes interest + capital.
The balance reduces over time.
You typically clear the mortgage at the end of the term.

Interest-only mortgage

Your monthly payment covers interest only.
The original loan amount remains and must be repaid at the end of the term.
You’ll need a credible plan for how the capital will be repaid.

Because interest-only doesn’t reduce the loan balance, it can look cheaper month-to-month—however, the overall plan and end-of-term repayment are critical.

How much income do you need for a £500,000 mortgage?

In the UK, lenders assess affordability using your income and outgoings, and this often includes income multiples as a starting point.

A common rule of thumb is that lenders may consider borrowing around 4 to 4.5 times your annual income, though this varies by lender and your overall financial profile (including outgoings, dependants, and credit history).

Illustrative example

If a lender offered 4.5x income:

To borrow £500,000, you might be looking at an annual income in the region of £111,000.

Some lenders may consider higher multiples in specific circumstances, but affordability checks are more detailed than a simple multiplier.

Deposit and LTV: what you may need for a £500,000 purchase

It’s important to separate the property price from the mortgage amount.

Lenders usually set deposit requirements based on the property value and resulting loan-to-value (LTV).
A higher deposit typically means a lower LTV, which can open up more product options.

Typical deposit ranges (illustrative)

For many residential mortgages, minimum deposits often fall somewhere between 5% and 10%, depending on the property and borrower profile.

If you were buying a property worth £500,000, a deposit of:

5% would be £25,000 (mortgage £475,000)
10% would be £50,000 (mortgage £450,000)

A mortgage of £500,000 would generally imply a higher loan amount than these examples, so your deposit and property value would need to be considered together.

Factors that affect the true cost of a £500,000 mortgage

Even if two people borrow the same amount, their monthly payments can differ due to:

1) Interest rate

This is usually the biggest driver. A higher rate increases monthly repayments and the total interest paid.

2) Mortgage term

Longer term → lower monthly payments, higher total interest.
Shorter term → higher monthly payments, lower total interest.

3) Mortgage type

Fixed-rate: payments typically stay the same for the fixed period.
Tracker: payments can move with the relevant reference rate.

4) Repayment method

Repayment vs interest-only can significantly change the monthly payment and what happens at the end of the term.

5) Your deposit and LTV

A lower LTV can improve the range of available deals.

6) Credit history and affordability profile

Lenders may price risk differently based on credit history and your wider financial situation.

Next steps: getting accurate figures for your situation

A £500,000 mortgage is a substantial commitment, so it’s worth getting your numbers right before you apply. A broker can help you:

estimate what you could borrow based on your income and outgoings
compare repayment options (including term and product type)
understand how deposit and LTV may affect the deals you can access
prepare for the paperwork lenders typically request

If you’d like, speak to a mortgage broker to run through your details and get a clearer view of what a £500,000 mortgage could cost for you, not just as a generic example.