Repayments On An $800K Mortgage: Everything You Need To Know
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How Much Will You Pay Per Month On A $800,000 Home Loan?
Your estimated monthly repayment for an $800,000 principle-and-interest home loan would be around $4,796 for a 30-year loan with an annual interest rate of 6%.
Keep in mind that your monthly repayment depends on factors like interest rate, loan term, taxes and insurance.
Here is a table showing your monthly principal-and-interest repayment for an $800,000 home loan at 5%, 6%, and 7% interest rates.
| Loan Term (Years) | 5% Interest Rate ($) | 6% Interest Rate ($) | 7% interest rate ($) |
|---|---|---|---|
| 15 | 6,326 | 6,751 | 7,191 |
| 20 | 5,280 | 5,731 | 6,202 |
| 25 | 4,677 | 5,154 | 5,654 |
| 30 | 4,295 | 4,796 | 5,322 |
How Much Deposit Do You Need For An $800K Home Loan?
You would need a deposit of $200,000 for a $800K home loan. Most lenders typically require a deposit of at least 20% of the property value, and with a 20% deposit, you generally avoid paying Lenders Mortgage Insurance (LMI). So, if you’re buying a property priced at $1,000,000, you will need a loan of $800,000 and $200,000 as a deposit.
There are lenders that will lend up to 95% of the property price, provided you fulfil their requirements.
With a guarantor, you’ll be able to borrow up to 105% without a deposit.
Additional Mortgage Costs To Consider
In addition to your deposit, you also need to budget for the additional costs of buying a house, which typically amounts to about 5% of the property price. For a property valued at $1,000,000, this would mean approximately $50,000 in extra costs.
Therefore, your total upfront costs for an $800,000 mortgage would be your deposit plus these additional costs, which comes to:
$200,000 (deposit) + $ 50,000 (additional costs) = $250,000
How Much Do You Need To Earn For An $800K Mortgage?
You need an annual income of approximately $200,000 to afford a $800,000 home loan, assuming you don’t have any unsecured loans and have minimum monthly living expenses. Keep in mind that actual income requirements can vary based on your personal financial situation and lender criteria.
What Process Is Involved In Getting An $800K Home Loan?
The process includes assessing your financial situation, saving for a deposit, getting a mortgage broker, getting pre-approval, finding a property, applying for the loan, undergoing valuation and approval, receiving the loan offer, and completing settlement. Each step ensures you are financially prepared and that the loan suits your needs.
For a detailed guide on the steps, check out our home loan application process page.
What Factors Affect Monthly Repayments?
Monthly repayments are affected by the interest rate, loan term and repayment type.
Interest rates: Higher interest rates increase your monthly repayments, but the same does not apply to a lower interest rate. If your interest rate decreases, the lender will keep the monthly repayments the same but charge you less interest. This means a greater portion of each payment goes towards paying off the principal, which will help you pay off your loan faster.
Loan term: Extending the loan term can reduce the amount of each monthly repayment, making it more manageable. However, this also increases the total amount of interest paid over the life of the loan. Conversely, shortening the loan term does the opposite.
Repayment type: The type of repayment plan chosen directly affects your monthly repayment amount. Principal and interest repayments are typically higher than interest-only repayments initially, as they cover both the loan balance and the interest. In contrast, interest-only repayments are lower because they cover only the interest, leaving the principal unchanged during the interest-only period. If you switch between these repayment types, your monthly repayments will increase or decrease based on the plan chosen.
How Can I Manage And Reduce Repayments?
Managing the repayments on an $800,000 mortgage can be challenging, but there are ways to ease the burden. Refinancing your loan to take advantage of lower interest rates from other lenders can greatly reduce your monthly repayments.
If you prefer to stay with your current lender, consider negotiating a lower interest rate, switching to minimum repayments, or opting for interest-only repayments to lower payments in the short term. Using an offset account to link your savings to your mortgage can help the interest payments, and switching to a fixed rate can provide consistent and predictable payments.
Don’t Miss Out: Get Started on Your $800K Mortgage Now!
Our expert mortgage brokers are here to provide you with personalised advice and support for your needs. Whether you’re ready to apply for an $800K mortgage or simply have questions about your home loan options, we’re here to help every step of the way.
Contact us now to:
Understand your borrowing capacity
Get pre-approval for your loan
Explore the best interest rates and loan options
And, we’ll be here to provide ongoing support after your loan has settled, offering regular home loan health checks and ensuring you make the most of your mortgage features.
Don’t wait! Get in touch with us today for a free consultation. Call us at 1300 889 743 or fill out our free online enquiry form to get started.