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£40,000 mortgage repayment example

Written By:
Myles Robinson - Expert Finance Advisor

Posted: Jan 5, 2023

Fact Checked By:
David Nicholson - Finance Editor

£40,000 mortgage repayments example, lenders and how to get approved

Although a £40,000 mortgage is not a large amount to borrow, it’s a good idea to research professional advice from a mortgage broker.

We can help you get approved for a mortgage in just 24 hours, start online below now:

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This guide will show you how to calculate your monthly repayments, whether £40K is the maximum amount you can borrow, and how a broker could help you get approved.


What are the monthly repayments for a £40,000 mortgage loan?

It is important to understand the various rates of interest and repayment terms when you take out your £40k mortgage. These can have a major impact on your costs. It would be unreasonable to expect you to accept a loan like this without understanding the implications for your future.

To get an exact estimate of the monthly cost of a mortgage with this amount, use our calculator.

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How does our £40,000 mortgage calculator work

Monthly payments: We divide the amount of your mortgage and the total interest by the number of months that you wish to repay the money.

Rounding up the repayment amounts
To calculate the interest you would pay on your mortgage; we use the unrounded repayment figures.

Interest rates:
The rate calculates the total interest you would pay over the term of your mortgage. The mortgage repayment calculator assumes that the rate will not change over the term of the mortgage.

Timing of interest conversion:
Assume that interest will be charged at the same rate as mortgage payments.

Compare different mortgage offers using the APRC (annual percentage rate of charge). The APRC values can be rounded to the nearest one-tenth of a decimal place.

However, there is no decimal place when the value is a whole number. For example, 3.0% would be referred to as 3%.

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Mortgage repayment calculator for a £40,000 mortgage

The mortgage repayment calculator will tell you how much your mortgage payments will cost each month as well as overall. Our calculator will calculate the total amount of your mortgage, the term length, interest rate and principal.

Example calculations

There are many options for a £40,000 mortgage. The costs will determine which route you choose. Below are repayment tables that provide some key data, such as length of repayment, interest rates, and mortgage values. The most appropriate value will be obvious to you.

The future costs of interest rates ranging from 1% to 5.5%, and with repayment terms of 15-30 years are shown in each table. To improve our research, we also included mortgage values ranging from £40,000 to £50,000.

Below are the tables.

1% Repayment Rate

A small mortgage may be possible with a low-interest rate between 1-2% and 2-3%. However, these rates are usually reserved for introductory offers before moving to the lender’s standard variable rate (SVR).

2% Repayment Rate

Below is a table that shows loans between £40k and £50k with different terms and a 2% interest rate.

3% Repayment Rate

Based on your situation, a higher percentage of lenders might consider a £40,000 mortgage with a 3% rate of repayment.

4% Repayment Rate

Many lenders offer mortgages at rates between 3-4.5%.

5% Repayment Rate

Mortgage lenders might offer you a loan at a 5% rate, depending on your financial situation. The table below shows how much you’d pay each month.

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How much does your salary have to be, to pay for it?

You can borrow 4.5 times your monthly salary. However, this will vary from lender to lender.

While some mortgage lenders will use income multiples to determine the maximum amount they can lend, others will base their assessment on your application.

Other factors can affect your overall affordability, such as your deposit amount, credit rating, outgoings, income, age, and type of employment. Income multiples might not be an issue if you only look for a small mortgage or loan.

Use our mortgage affordability calculator to find out how much you can borrow.

Calculator for mortgage affordability

The affordability calculator will tell you how much you could borrow from a mortgage lender. Enter your household income and the calculator will calculate the amount you can borrow from a mortgage lender. Use the below mortgage calculator:


Take a look at other mortgage repayment examples:


What is the best deal for your £40,000 mortgage?

Once we have an idea of how much money you want to borrow and what it will cost you in the end, we can make some final decisions. Many firms can offer mortgages up to £40k. Each provider has a different interest rate and repayment rate.

We must consider the different packages firms offer to ensure we find the right plan for you. It can be tedious and time-consuming.

We have made it easy by creating a live online search tool. This allows you to enter the exact criteria you want to find the best deals.

You will only need to enter the desired mortgage value and other information, such as the mortgage deposit and repayment method. After completing all this information, you will be one step closer to getting your £40,000 mortgage.

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