I Can Afford the Deposit, but What About the Monthly Payments?

Saving for a deposit is often the biggest hurdle when buying a home. But once you’ve got that milestone behind you, the next crucial question is: Can I actually afford the monthly payments?

It’s easy to focus on the lump sum you’ve worked so hard to save, but your mortgage is a long-term commitment. Understanding how interest rates, loan size, and mortgage term affect your payments is key to staying financially comfortable after you move in.

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Why monthly payments matter more than you think

• Rates affect affordability — A difference of just 1% in the interest rate can add or remove hundreds from your monthly bill.
• Term length spreads the cost — A 25-year mortgage will have higher monthly payments than a 35-year one, even if the loan size is the same.
• Budget balance — Stretching to the max each month could leave you vulnerable if rates rise or your circumstances change.

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Example: How payments vary by rate and term

Let’s look at a £200,000 mortgage to see how the numbers change.

• 25-year term at 4% → ~£1,055 per month
• 25-year term at 6% → ~£1,290 per month
• 35-year term at 6% → ~£1,155 per month

As you can see, the same mortgage amount can feel very different depending on rates and how long you spread the repayment.

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How to plan for long-term affordability

1. Stress-test your budget
   • Ask yourself: What if rates rose by 1–2%? Could I still manage comfortably?
2. Think beyond today
   • Future costs like childcare, career changes, or lifestyle upgrades can impact affordability.
3. Explore your options
   • A broker can help you compare fixed vs. tracker rates, shorter vs. longer terms, and even repayment vs. interest-only mortgages.
4. Don’t just focus on the headline rate
   • Fees, flexibility, and early repayment charges all play a role in overall cost.

Book a free mortgage review today and discover the monthly payment options that fit your budget now — and in the future.