When you apply for any size loan, your lender will need to take the following factors into consideration before approving your application. These are typically referred to as the lender’s eligibility criteria.

Do you have a suitable size mortgage deposit?

You are more likely to be accepted for a £400,000 mortgage if you have saved a substantial deposit to put towards the cost of your new home. The majority of lenders will ask for at least 10% of the purchase price, but usually the more you can put down as your deposit, the better your mortgage terms will be. This is because the Loan to Value (LTV) ratio will be lower, so there is considered less risk to the lender.

What are your current financial commitments?

It is important to think about all of your monthly outgoings, and whether or not you can afford a £400,000 mortgage repayment on top of your existing living costs. Your provider will likely ask to see copies of your bank statements to determine whether or not you are in a reasonably comfortable financial position.

Also, you will need to consider the costs when you move into your new home. For example, how much you will pay on utilities, broadband, council tax, etc will be taken into consideration to establish how affordable your mortgage repayments will be on top of that.

What is your personal situation?

Your marital status will impact your eligibility for a £400,000 home loan. If you are married, both of your incomes will be taken into account to work out the amount you can borrow, as it will likely be a larger amount with you both being named on the contract. However, you should keep in mind that if your partner has a low credit score, or is in a significant amount of debt, this could negatively affect your chances of getting a mortgage in the first place.

You’re not less likely to be accepted for a mortgage if you’re single, the lender will just want to ensure that you are generating enough income to meet the affordability criteria and qualify for the loan.

What are the repayments on a £400,000 mortgage?

The amount you will pay back towards your mortgage on a monthly basis will depend on three factors:

The type of mortgage you have applied for – whether you have chosen a repayment or interest-only mortgage
The interest rate being applied to your repayments
The length of your mortgage term – typically 30 years on average


If you’re not sure how to go about getting a £400,000 mortgage or have any further questions contact Finance Advice Centre today.