While £25k is a small mortgage amount, there are scenarios where you might need to borrow this sum. Perhaps this is the figure outstanding ahead of your remortgage, or maybe you have a large deposit and need £25k as a top up.
If this is the amount you need, it’s a good idea to do some calculations before you get started, and here, you will learn how to work out what the repayments will be on a mortgage of this size and how to kickstart your application.
How much are the repayments on a £25,000 mortgage?
Based on a typical residential mortgage deal under current market conditions, the monthly repayments on a £25,000 mortgage are roughly £146 per month.
This example calculation is based on a capital repayment mortgage with a 25-year term and an interest rate of 4%, which is representative of the current market right now (September 2024).
Taking a £25k mortgage out on this agreement would mean paying back a total of £39,588 by the end of that 25-year term, assuming no changes are made to the mortgage.
The exact cost of your mortgage may vary depending on the rate you qualify for and other factors, which we will explore in depth in this article.
Calculate your mortgage repayments
You can use our repayments calculator below to work out what your £25,000 mortgage will cost per month and overall. The repayment amount is set to £25k by default, so simply enter a term length, interest rate and repayment type to get some fast results.
Now that you have a better idea of what your repayments will be, you can compare the latest mortgage deals for free on Teito and choose one in real time - get started here.
What factors will affect your mortgage repayments?
The exact amount that your £25,000k mortgage will cost each month and overall will depend on the following factors:
- Your mortgage interest rate: The rate you qualify for will depend on the loan-to-value (LTV) ratio (determined by how much deposit you have), the overall strength of your application, and the type of mortgage product you choose.
- The term length: Mortgages with a longer term length have lower monthly repayment but are more expensive overall due to the extra interest instalments.
- The repayment type: Most UK mortgages are offered on a capital repayment basis, but interest-only is a common alternative. The repayments will be different on a £25k interest-only mortgage as you would only have to pay the interest each month.
We will now take a closer look at how these factors affect the cost of your mortgage.
Interest rate
This table shows how the repayments on a £25k mortgage will vary across different rates. We have used a capital repayment mortgage with a 25-year term for these calculations.
Mortgage Amount | Interest Rate | Monthly Repayments | Overall Repayment |
£25k | 3.5% | £125 | £37,547 |
£25k | 4% | £132 | £39,588 |
£25k | 4.5% | £139 | £41,687 |
£25k | 5% | £146 | £43,844 |
£25k | 5.5% | £154 | £46,057 |
£25k | 6% | £161 | £48,323 |
It’s worth taking note that some mortgage product types have different rates to others. For example, longer fixed-rate mortgages tend to have lower rates than short-term ones, and deals with an upfront product fee typically have lower rates than fee-free ones.
Term length
The table below shows how the cost of a £25k mortgage can vary across different terms. These calculations are based on a capital repayment mortgage with a 5% rate.
Mortgage Amount | Term Length | Monthly Repayments | Overall Repayment |
£25k | 10 years | £253 | £30,374 |
£25k | 15 years | £185 | £33,286 |
£25k | 20 years | £151 | £36,359 |
£25k | 25 years | £132 | £39,588 |
£25k | 30 years | £119 | £42,967 |
£25k | 35 years | £111 | £46,491 |
£25k | 40 years | £104 | £50,153 |
£25k interest-only mortgage repayments
The table below shows what the repayments would look like on a £25k interest-only mortgage across different rates and an example term length of 25 years.
Mortgage Amount | Interest Rate | Interest-only Payments (Monthly) | Overall Repayment |
£25k | 3.5% | £73 | £46,875 |
£25k | 4% | £83 | £50,000 |
£25k | 4.5% | £94 | £53,125 |
£25k | 5% | £104 | £56,250 |
£25k | 5.5% | £115 | £59,375 |
£25k | 6% | £125 | £62,500 |
Increasing your borrowing
Perhaps you have the option to borrow more on your mortgage or remortgage. With this in mind, we have put together the table below to give you an idea of how the repayments on a £25,000 mortgage compare to other amounts in this ballpark. These examples are for a capital repayment mortgage with a 5% interest rate, taken out on a 25-year term.
Mortgage Amount | Monthly Repayments | Overall Repayments |
£25k | £132 | £39,588 |
£30k | £158 | £47,505 |
£35k | £185 | £55,423 |
£40k | £211 | £63,340 |
£45k | £238 | £71,258 |
£50k | £264 | £79,176 |
Calculations all done? Here are your options now...
Other costs to be aware of
Although the repayments on a £25,000 mortgage can be relatively small, there are other costs involved for a mortgage application, so you should take these on board too:
- Product fees: Can range between nothing and £2,000. Fee-free deals often come with higher rates, but the fee itself can sometimes be added to the mortgage.
- Booking fee: An admin cost as part of the mortgage application process. It can range between £99-250 and is sometimes rolled into the product fee.
- Valuation fee: Some lenders will expect you to foot the cost of having the property you’re buying valued, and this can set you back between £250-1,500.
- Telegraphic transfer fee: A small fee to cover the cost of transferring your mortgage funds to your solicitor so the deal can be closed, usually between £25 and £50.
- Account fee: Another admin cost, usually between £100 and £300, to cover the set up, maintenance and eventual closure of your mortgage account held by the lender.
Tip for reducing your mortgage payments
Even though £25k is a relatively small mortgage amount, it can still pay to take the tips below on board to minimise your mortgage costs:
- Put down a larger deposit:Not only would you need to borrow less, putting down extra deposit can reduce the loan-to-value (LTV) ratio and help you qualify for a lower rate.
- Improve your credit situation:Waiting for any bad credit to disappear from your credit files, paying off debts you’re in a position to clear, and paying any existing bills and credit agreements on time ahead of your application can also help you land a lower rate.
- Consider a longer mortgage term:This will reduce your monthly payments in the short term (on a capital repayment agreement), but you will be paying more in interest overall.
- Consider interest-only:Interest-only mortgages have lower monthly payments but you will need a repayment vehicle to settle the debt at the end of the term. Be sure to seek professional advice from a qualified mortgage broker before choosing this option.
Compare rates and deals for your £25k mortgage today
Now that you have run your calculations, you can compare rates and deals for £25,000 mortgages for free on Teito and access support from one of our brokers, if you need it.
Here are just some of the reasons why people choose us for their mortgage needs:
- You can access rates from 90+ lenders for FREE in seconds
- Our brokers often have access to exclusive deals
- We are 5-star rated on leading review websites
- You can secure an agreement in principle in minutes
Ready to compare rates and deals and take advantage of a free, no-obligation chat with a broker who specialises in small mortgage amounts? Get started here.
FAQs
The main obstacle you are likely to face is the minimum loan amounts that some UK mortgage lenders have. Certain mortgage providers won’t offer mortgages less than a certain amount, with common limits being anywhere between £30,000 and £50,000.
However, there are a fair number of lenders who offer mortgages as low as £25,000, but it is recommended that you use a whole-of-market broker to filter out those that don’t.
You could get approved for a mortgage of this amount with annual income as low as £5,560 per year, as most mortgage lenders will let you borrow at least 4.5 times your salary.
The amount of mortgage deposit you will need will be based on the value of the property, not the mortgage amount. You will need an absolute minimum of 5% of the property’s value in most cases, although a limited number of no-deposit mortgage options exist.
Choosing an Adviser
Selecting a qualified and experienced mortgage adviser is of great importance. To choose a suitable adviser, evaluate their qualifications, experience, and reputation, and ensure they are regulated by the Financial Conduct Authority (FCA).
Read reviews from previous clients and make sure they provide a clear explanation of the products and services they offer, as well as the fees and charges associated with them.
