How Much Does a £150k Mortgage Over 25 Years Really Cost?

If you’re hoping to secure a mortgage for £150,000, it’s tempting to focus on the monthly mortgage repayment when considering the cost of the product. As mortgages are complicated, there are many other costs to consider before you sign on the dotted line.

To understand the true cost of borrowing £150,000, you need to consider other factors. For example, the interest rate, type of product, product term and overall term period. Over 25 years, even small changes to the interest rate can increase the total cost of the mortgage by thousands of pounds.

In this article, we will break down how repayments on a £150k mortgage are calculated, how much interest may be payable over time, and what factors impact the cost.

Let’s jump in.

What Are the Monthly Repayments on a £150k Mortgage Over 25 Years?

The monthly repayments on a £150,000 mortgage over 25 years depends on a couple of factors. These are: the type of mortgage and interest rate selected. Let’s explore both.

Mortgage Type

There are only two types of mortgage payment to choose from – Capital Repayment and Interest-only.

Capital Repayment

Most borrowers looking for a residential property will opt for a capital repayment mortgage. With capital repayment, each payment covers both interest and a portion of the loan balance. Capital repayment deals are popular with residential mortgages because borrowers eventually want to own their home outright for the additional security. Because capital repayment covers both capital and interest, the monthly repayment will be higher on a capital repayment mortgage compared to an interest-only deal.

Interest-Only

Interest-only deals are normally demanded for investment properties, like buy-to-lets, or second homes. This is because landlords normally want to maximise their rental profitability. With interest-only, the monthly mortgage payment only covers the interest portion of the loan, so the payments are usually much lower than capital repayments. This may be attractive, but remember the overall mortgage balance will remain the same and will be payable in full when the mortgage term expires.

Here’s the difference in monthly payment between a capital repayment and interest-only £150k mortgage, both with an interest rate of 3% over 20 years:

Interest Rate

The example repayment figures in the previous table assume that an interest rate will remain at 3% for 20 years. In reality, a mortgage interest rate is unlikely to remain the same throughout the term period. After the initial product term expires, which may only be 2, 3 or 5 years, the interest rate will likely change following a remortgage or reversion to the lender’s Standard Variable Rate (SVR).

To stop your deal from reverting to the lender’s Standard Variable Rate, many borrowers use a whole-of-market, fee-free broker, like Boon Brokers. Our expert broker team will contact you 6 months before your product term expires to prepare for your remortgage.

How Much Interest Do You Pay on a £150,000 Mortgage in the UK?

The amount of interest you pay on a £150k mortgage depends on the interest rate and how long you borrow over. We have already explored the impact of rates on the interest, so let’s assess how the term period can affect the overall interest payable.

People often don’t realise that the term period is a significant driver in the overall interest due for your mortgage. As a general rule of thumb, the longer the term period, the more interest is paid. Let’s explore an example, assuming a 3% interest rate.

What Is the Total Amount Repaid On a £150,000 Mortgage Over 25 Years?

The total amount repaid on a £150,000 mortgage over 25 years will account for the capital and interest portions of the loan. As we have established, even though the loan amount stays the same, the interest you pay can vary greatly depending on the interest rate. Assuming that all other features remain the same, the interest rate will have the biggest impact on the total amount you repay in capital and interest over the 25 year period.

To illustrate the total amount repaid on a £150,000 mortgage over 25 years, let’s assume interest rates between 1 and 5% again to highlight the cost differences:

These stark differences between the total repayment figures should make you realise why remortgaging is so important. If you do not remortgage, you will be stuck on the lender’s Standard Variable Rate, which will probably have a high interest rate. Fee-free brokers, like Boon Brokers, can assist with your remortgage to make sure you don’t pay unnecessarily high rates of interest.

Is a £150k Mortgage Affordable on an Average Salary?

Whether or not a £150,000 mortgage is affordable on an average salary depends on a number of factors. This includes your income, outgoings, credit file, your age, and interest rate available. Mortgage lenders don’t just consider salary when assessing if a loan is affordable for you.

According to the UK’s Office for National Statistics, the median gross annual earnings for full-time employees in the UK was around £39,800 per annum as of April 2025.

You may be wondering how much income is needed for a £150k mortgage. Since many lenders use a 4.5x multiplier of income in their initial calculations, this would take the maximum mortgage available for someone on a £39,800 gross annual income to £179,100. If this were the only consideration, a £150k mortgage would be affordable for someone earning the current median annual income in the UK.

Assuming that you can access a long mortgage term and have no financial commitments, adverse credit or significant outgoings, you would need to earn at least £33,333.33 per annum for mortgage lenders to lend you £150,000. Although, mortgage lending is not guaranteed and you will need to consult a mortgage broker, like Boon Brokers, to establish your true maximum borrowing capacity.

What Happens to a £150k Mortgage When a Fixed-Rate Deal Ends?

When a fixed-rate on a £150,000 mortgage expires, your lender will switch your deal to their Standard Variable Rate. This rate is set at the lender’s discretion and is often far higher than your previous fixed rate.

At this point, you’re not stuck on the lender’s SVR. You can use the services of a mortgage broker to advise and arrange your remortgage to the most suitable product on the market. This may not be with your current lender, which is why it’s so important to use a whole-of-market broker to find the best deal available.

If your current lender is offering your most suitable mortgage option, it’s normally better for your broker to arrange a product transfer. Either way, if you choose to remortgage or process a product transfer, it’s likely to be cheaper than if your mortgage remains on the lender’s SVR.

How Do Mortgage Fees Affect the Real Cost of a £150,000 Loan?

Mortgage fees can have a significant impact on the cost of a £150,000 loan, even if the interest rate seems competitive. This is why brokers, like Boon Brokers, review the mortgage fees and interest rate when making a mortgage recommendation. There are many mortgages with low interest rates that seem attractive on the surface but, when you research them further, their fees make them unsuitable. This is why, in some cases, a mortgage with a higher interest rate but lower fees can be cheaper than a deal with a lower interest rate but higher fees.

Common mortgage fees include arrangement fees, valuation fees, and legal costs. Arrangement fees, also known as product fees, can usually be added to the loan. Just bear in mind that by adding it to the loan, you will be paying more interest on the mortgage during its term period.

The impact of fees will vary depending on the lender, the mortgage product, and how long you remain on each deal. It’s important to remember that every time you remortgage, you will probably incur more mortgage fees.

If you remortgage every two years and each new deal comes with a £999 product fee, those fees can quickly add up. Over time, this may result in higher overall costs compared with remortgaging less frequently, such as every five years, assuming similar fees apply. Boon Brokers will consider all mortgage fees when making a mortgage recommendation, not just the headline interest rate.

Does Extending a Mortgage Term Reduce the Overall Cost in the UK?

Extending a mortgage term may reduce your monthly mortgage repayments, but it does not usually reduce the overall cost of the loan. In fact, it normally does the exact opposite. Borrowing over more years means that more interest is charged for a longer period of time. This means, even though the monthly cost feels more affordable, you will incur more interest in the long-run. This is why borrowers are typically faced with the dilemma of either having lower monthly costs but paying more interest in the long-run or vice-versa.

Some borrowers decide to extend their term temporarily so they can manage their finances better, with the intention of overpaying or reducing their term at a later date. Fortunately, you will have many opportunities to amend your mortgage term throughout your term period. This is because you can change your term every time you remortgage. For example, if you select a 2 year fixed deal, you will be able to change your term after the 2 years expires. A reputable mortgage broker will discuss your mortgage term at each remortgage opportunity.

Generally speaking, it’s advisable to shorten your mortgage term where possible to reduce the overall interest paid on the loan. Although borrowers who want the best of both worlds may agree to a mortgage product with a long overall term, to reduce their monthly payment, but with the ability to make overpayments.

By making overpayments, you will automatically reduce the overall balance and/or term of the loan. Most mortgage lenders will allow up to 10% overpayments of the amount outstanding per annum without you incurring an early repayment charge. This approach relies on making regular overpayments to reduce any unnecessary interest payments over the course of your mortgage.

How Can a Broker Help You

A whole-of-market broker, like Boon Brokers, can help advise and arrange your mortgage to make sure you select the best deal for your circumstances. A broker can compare deals across the market, explain the features of your loan, and guide you through the application process.

Boon Brokers offer a fee-free service, meaning you don’t pay for advice or support during the mortgage process. How is this possible? Lenders pay a commission if your mortgage completes.

Contact Boon Brokers today to arrange a free consultation with one of our expert online brokers.