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How much does a £500,000 mortgage cost?
Page edited and updated 30 July 2024.
Trinity Financial has access to a host of banks and building societies offering £500,000 mortgages.
Mortgage rates are much more competitively priced than they were, with two-year fixes priced at around 4.39% and five-year fixes at around 3.99%.
Many banks and building societies have had a busy start to the year and want to issue more mortgages to first-time buyers, next-time buyers and borrowers keen to switch to cheaper rates.
The lenders offer a range of rates, including two, three, five and ten-year fixes, trackers and discounted variable rates. Each product is priced separately, and the difference between these rates can be substantial depending on the lender you apply to.
Here are some examples of the rates on offer from the leading lenders:
How much does a £500,000 mortgage cost?
Santander for Intermediaries has a 4.51% rate fixed until 02 December 2026 for applicants with a 40% deposit. This mortgage has a £999 arrangement fee and a free property valuation. The overall cost for comparison is 7.1% APRC.
The monthly repayments on a £500,000 interest-only mortgage would be approximately £1,879.17. This would increase to £2,536.40 on a full capital repayment mortgage over a 30-year term.
Santander has some generous mortgage income multiples. For borrowers with a single or combined income of £45,000-£99,999, the income multiple will be 5.00x salary(s) for borrowers provided they have a 15% deposit. The income multiple reduces to 4.45x salary(s) for borrowers with less than a 15% deposit.
Santander offers 5.5 times salary for higher earners wanting £500,000 mortgages
For those with a combined income of £100,000 or more, Santander's multiple rises to 5.50x for mortgages when borrowers have a 25% deposit and 5.00x for mortgage borrowers with less than a 25% deposit.
Santander also offers part interest-only and full interest-only mortgages. Where any part of the mortgage is on interest only, and the combined gross of the applicant(s) income is less than £100,000, the maximum income multiple is 4.45x income. If the combined income is over £100,000, the income multiple will be up to 5.50x for those with a 25% deposit and 5.00x for those with less than a 25% deposit.
Primary and secondary incomes and proof of income must be evidenced.
How much does a £500,000 mortgage cost with a 25% deposit?
HSBC for Intermediaries offers borrowers a 4.37% five-year fixed rate looking for a £500,000 mortgage. The lender requires a 25% deposit to qualify for this rate, and the arrangement fee is £999. After the fixed rate, the mortgage reverts onto the lender's 6.99% standard variable rate, and the overall cost for comparison is 6.8% APRC.
If you wanted to borrow £500,000 over a 30-year term on full capital repayment, the monthly costs would cost £2,494.95 or £1,820.83 a month on interest only.
HSBC's mortgage income multiples are as follows: single or joint applications with less than a 15% deposit but an income of more than £45,000 and up to (but not including) £100,000, the multipliers 4.75x income. For higher earners on more than £100,000 a year, 5.50x income multiple applies depending on the deposit size. Or those with less than a 15% deposit, the maximum income multiple is typically 4.49%.
Is it worth taking a fixed or tracker £500,000 mortgage?
Banks and building societies are offering significantly cheaper rates than they were, and many fixed mortgages are much lower than the current 5.25% Bank of England base rate.
Aaron Strutt, product director at Trinity Financial, says: "Most borrowers are taking two or five-year fixes rather than trackers. Five-year fixes tend to undercut the two-year fixes but they are getting cheaper.
"Borrowers still taking variable-rate mortgages are typically planning to make lump sum overpayments or potentially sell their homes soon. Some tracker rates have switch-to-fix facilities, so if rates rise in the future, they can take a two—or three-year fixed deal.
"The lenders are keen to provide larger mortgage loans. Some apply more generous income multiples to borrowers earning at least £75,000."
Call Trinity Financial on 020 7016 0790 to secure a mortgage, submit a questionnaire or book a consultation
The information contained within was correct at the time of publication but is subject to change.
Your mortgage is secured on your property. Your property may be repossessed if you do not keep up repayments on your mortgage
The margin between the cheapest residential and buy-to-let mortgages is reducing as the lenders continue to tempt landlords to purchase more properties or remortgage.
There is a selection of banks and building societies providing £500,000+ buy-to-let mortgages at low rates.
BM Solutions is offering one of the cheapest five-year fixed-rate buy-to-let mortgages. It is priced at 4.64% and has a £3,999 arrangement fee. Other rates with lower arrangement fees are available.
After the fixed-rate period, the mortgage reverts to the lender's 9.59% standard variable rate and the APRC is 7.1%. As the mortgage is available on interest-only, the monthly payment on a £500,000 loan would be £1,933.33 per month. This rises to £2,575.19 on capital repayment.
Trinity Financial has direct access to BM Solutions decision-makers, and our brokers have a track record of accessing great mortgages.
The Financial Conduct Authority does not regulate most Buy to Let Mortgages
Trinity's brokers have access to a range of lenders offering £500,000+ mortgages. Each bank or building society uses different affordability calculations to determine the maximum loan.
Mortgage lenders use mortgage affordability calculators to work out how much they will lend and they typically provide five times single and joint salary mortgages.
For wealthier borrowers earning over £75,000, it is possible to secure 5.5 times income to borrowers with a limited amount of personal debt.
Trinity Financial specialises in arranging £500,000+ mortgages and our team of expert advisers do everything possible to secure fast mortgage offers and the lowest possible rates.
More of the lenders have set up specialist lending teams to agree larger mortgage loans, and we have access to specialist lenders not available on the high street.
Click here to view some of the mortgages we have arranged over the last 15 years.
Trinity Financial's brokers have access to specialist contacts at many of the biggest banks and building societies, as well as private banks and niche lenders.
These contacts help us to get mortgages agreed quickly and efficiently. In some cases, we even get borrowers the mortgage they need when they fall outside of the lender's standard qualification criteria.
The minimum deposit required to secure a mortgage is 5%. Rates are lower with a 10% deposit.
In order to access the cheapest rates in the mortgage market, borrowers will need a 35% or 40% deposit, although they are not much more expensive if you have a 20% or 25% deposit.
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