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How to get a £150,000 loan
See if you're eligible to borrow £150,000 and learn how to compare lenders.
Think carefully before securing other debts against your home. Your home may be repossessed if you do not keep up repayments on your mortgage or any other loan secured on it.
£150,000 loan calculator
Table: sorted by overall cost for comparison (representative APRC)
Property value
Current mortgage
Loan term
Overall representative example
If you borrowed £35,000 over a 14-year term at 8.95% p.a. (variable), you would make 168 monthly payments of £418.88 and pay £70,371.84 overall, which includes interest of £30,326.84, a broker fee of £3,550.00 and a lender fee of £995.00. The overall cost for comparison is 11.8% APRC representative.
If you borrowed £35,000 over a 14-year term at 8.95% p.a. (variable), you would make 168 monthly payments of £418.88 and pay £70,371.84 overall, which includes interest of £30,326.84, a broker fee of £3,550.00 and a lender fee of £995.00. The overall cost for comparison is 11.8% APRC representative.
What's in this guide?
Can I get a £150,000 loan?
If you own a home and have enough equity in your property, you may be able to use this equity as security to allow you to borrow £150,000. Your income will need to be sufficient to cover the repayments on the loan (plus any other financial commitments you might have).
While your credit history will be likely to impact the interest rate you’d receive, the good news is that secured “homeowner” loans are commonly issued to borrowers with both good or bad credit.
How much equity do I need for a £150,000 loan?
Each loan specifies a maximum “LTV”. This is the loan-to-value ratio, and it basically means the maximum overall amount of borrowing allowed as a proportion of the property’s value.
For example, if your house was worth £400,000, and you had £150,000 still owing on your mortgage, a homeowner loan specifying a maximum LTV of 75% could allow you to borrow an additional £150,000.
Each application will be considered on its own merit, however. So unfortunately, having sufficient equity doesn’t guarantee approval, but it can guarantee that your application will be considered.
How much are payments on a £150,000 loan?
| 3% p.a. interest | 6% p.a. interest | 9% p.a. interest | |
|---|---|---|---|
| 7-year term | £1,982 | £2,191 | £2,413 |
| 10-year term | £1,448 | £1,665 | £1,900 |
| 15-year term | £1,036 | £1,266 | £1,521 |
| 20-year term | £832 | £1,075 | £1,350 |
How much does a £150,000 loan cost overall?
| 3% p.a. interest | 6% p.a. interest | 9% p.a. interest | |
|---|---|---|---|
| 7-year term | £166,488 | £184,068 | £202,722 |
| 10-year term | £173,809 | £199,837 | £228,016 |
| 15-year term | £186,457 | £227,841 | £273,852 |
| 20-year term | £199,655 | £257,915 | £323,901 |
The loan illustrations above use approximate, rounded figures, based on a flat interest rate. Longer-term secured loans are likely to have variable interest rates. If the rate goes down during the course of the loan, the monthly and overall costs would decrease. Conversely, if the rate rises during the course of the loan, the monthly and overall costs would increase. Current interest rates are low compared to historical averages.
How much income do I need for a £150,000 loan?
The minimum income requirements will vary depending on factors like the term of loan that you opt for. All lenders must be able to demonstrate that they are lending responsibly. So in other words, they must be careful to ensure that the proposed repayment schedule would be affordable for you, taking into account your income and outgoings. For example, an applicant with a £35,000 salary but relatively low regular financial commitments might stand a better chance than an applicant with a £50,000 salary and exorbitant monthly outgoings.
Ultimately your income is just one important part of the picture on which a lender will assess your case.
Loan companies often specify a minimum income requirement in their basic lending criteria (example below). Crucially, meeting these entry-level criteria means that you can apply, but doesn’t mean that approval is guaranteed.
What credit score do I need for a £150,000 loan?
When you secure a loan against property, your credit score becomes a less crucial factor – but remains a factor nonetheless. The importance given to your credit score will vary from lender to lender, with some lenders specifically aiming to serve those with bad credit. If you have a damaged credit record, you’ll likely be offered an interest rate that’s higher than the very best rates advertised by lenders.
How long does it take to get a £150,000 loan?
Secured loans can take 2-3 weeks to arrange and draw down. Although there aren’t solicitors involved, a property valuation of some form will be required and if there’s a “first charge” over the property, then that lender will also need to give its approval.
These extra steps make secured loans a little slower, but the trade-off for many is access to lower rates and/or larger sums.
How long does it take to pay off a £150,000 loan?
You can adjust your loan term in order to make your monthly repayments more affordable. Similarly, you can increase your monthly repayment in order to clear the loan in less time. As a general rule of thumb, spreading repayments over a longer timeframe normally makes for lower monthly repayments (but a higher overall cost). So it really depends on what you can afford to repay each month.
At a fixed annual rate of 4.0%, a £150,000 loan would take over 17 years to repay if your monthly repayment was £1,000. If you wanted to keep the monthly costs down, and paid £800 each month, it would take more than 24 years.
How do I get approved for a £150,000 loan?
Here is a non-exhaustive list of what matters to a lender when it’s weighing up the risk of offering you a loan:
- The amount of equity in your home. This is how much of the property you actually own, i.e. the current market value of the property minus whatever is still owing to your mortgage provider (if you have one).
- Your regular income and outgoings (and those of any co-signatories, if it’s a joint application). This is crucial when determining whether or not the monthly repayments would be affordable for you. Lenders will want to know what debt you’re currently carrying and how much that’s costing you each month. If your reason for seeking a new loan is debt consolidation, then naturally this will be taken into account.
- Your credit history. This is a file kept by credit reference agencies which records your borrowing history. Lenders will be hoping to see that you have a history of using credit responsibly. CCJs are also logged in your credit report.
- What you want the money for – i.e. the loan purpose. Lenders are pretty open-minded when it comes to the loan purpose, but may have a defined list of acceptable purposes or a defined list of unacceptable purposes.
- Some routine eligibility criteria like UK residency (some lenders will specify that you must have been a UK resident for a specific amount of time) and your age (both minimum and maximum).
£150,000 loans for the self-employed
Realistically, getting a £150,000 loan can be slightly harder for self-employed people. These individuals are seen as a higher risk for lenders because their income is perceived to be less stable. Still, there are lenders that specialise in homeowner loans for self-employed people. Expect to be asked for a little extra documentation – typically two years’ worth of accounts, SA302s/tax calculations, HMRC tax overview statements and possibly a reference from your accountant as well.
How to get a £150,000 personal loan
- Work out your budget. Our calculator can help you get an idea of how long a term you’d need to spread the loan over in order to get manageable monthly repayments. As a general rule of thumb, you should aim to clear the loan in as short a time as possible, while ensuring the monthly repayments are affordable. Loans with longer terms tend to come with a variable interest rate (although some secured loans offer an introductory fixed-rate period), so it’s sensible to leave yourself a bit of leeway so that if rates rise, you’ll be able to take it in your stride.
- Get to know your credit record. Knowing your credit score is helpful for understanding what options are available to you. For many lenders, you’ll need a good credit score in order to be approved for a £150,000 loan. Plenty of companies can help you get free visibility of your credit report that’ll let you know how you’re tracking. If your credit score doesn’t appear to be good enough, consider applying for a smaller loan or building your credit score first and applying at a future date.
- Shop around or, better still, consider a broker or loan-matching service. It’s generally a bad idea to simply go straight to one lender and apply. You should always compare multiple lenders online and look for the best price for the amount you need. For a loan as big as £150,000 even a slightly better rate can translate into thousands of pounds saved. A decent broker or loan-matching service can take your details and check your eligibility against products from multiple lenders in one go, saving you a lot of time (and hopefully money too). A number of lenders (such as Masthaven) actually only offer their loans through brokers.
- Apply. Perhaps the easiest way to apply for a £150,000 loan is with the help of a good broker. You’ll provide some basic details, agree to a credit check and the indicative result of your application will usually be made available within seconds. Bear in mind that you should only ever formally apply for credit when you’re pretty confident that you’ll get approved (lenders and brokers can help you to establish this beforehand). Each application for credit usually involves a search of your credit file, which causes a small (and usually short-lived) negative effect on your credit score.
Should I just remortgage?
Remortgaging is a popular strategy for homeowners to get hold of huge lump sums. This involves altering your mortgage deal and borrowing against the equity of your property. If you’ve got a lot of equity or can bag a low mortgage rate, this could prove more economical than a personal loan.
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