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KS4 · Year 10 · Lesson plan

Mortgages — the basics of buying a home with borrowed money

A classroom-ready 60 minutes lesson plan with starter, main, plenary, differentiation, SEND adaptations, EAL support and assessment criteria. Free to use, no login.

Key Stage
KS4
Year group
Year 10
Age range
14–15
Duration
60 minutes
Subject
Maths / PSHE / Citizenship
Cost
Free

Learning aim

Pupils can explain what a mortgage is, identify the four key components (deposit, term, interest rate, monthly repayment), and calculate basic monthly repayments.

CURRICULUM National Curriculum links

RESOURCES What you'll need

LESSON Lesson structure (60 minutes)

Opening
HOOK
Show a picture of a £250,000 house. Ask: "How would you buy this if you have £25,000 in savings?" Most pupils will say "borrow the rest." Confirm: yes — that loan is called a mortgage. About 70% of UK households over 35 have one. It's the biggest loan most people take out in their lifetime.
Direct teach
TEACH
Define mortgage: "a long-term loan secured against a house — if you don't keep paying, the bank can repossess the house." Four key components on the board: (1) Deposit = your money upfront, usually 5-25% of the house price (more deposit = better mortgage deals); (2) Loan amount (principal) = what you borrow = house price - deposit; (3) Term = how many years to pay it back, typically 25-30 years; (4) Interest rate = what the bank charges you, currently 4-6% APR on most fixed-rate deals. Worked example: £250,000 house, £25,000 deposit, £225,000 loan, 5% over 25 years = ~£1,316/month.
Pupils apply
GUIDED
Pupils work through three scenarios on the worksheet (using a lookup table for monthly repayments to avoid the maths burden): Scenario A: £200k house, £20k deposit, 25 yrs, 5%; Scenario B: £300k house, £45k deposit, 30 yrs, 4.5%; Scenario C: £400k house, £100k deposit, 20 yrs, 6%. For each, calculate the monthly repayment and the TOTAL amount paid over the term. Discuss: which is most expensive in total? Why?
Stretch / depth
CHALLENGE
Display the affordability rule: "UK banks usually lend up to 4.5× your annual salary." Then: "If you earn £30,000 a year and have a £15,000 deposit, what's the maximum house price you could afford?" Pupils calculate: max loan = £30,000 × 4.5 = £135,000. Add deposit: max house = £150,000. "What about with a £30,000 deposit?" (max £165,000). Build: deposit size has as much impact as salary on what you can afford. This is why so many first-time buyers struggle — saving the deposit is the hardest step.
Close
PLENARY
Each pupil writes: "A mortgage is ___" and "If I wanted to buy a £200,000 house, I'd need at least a ___ deposit." Share three. Final question: "Why does a bigger deposit usually mean a CHEAPER mortgage deal?" (Less risk to the bank → better interest rate.)

DIFFERENTIATION Adapting for all learners

Support (working below ARE)

Use round-number scenarios (£200k house, 5% rate, 25 years). Use a pre-printed monthly repayment table to look up rather than calculate. Focus on understanding the four components.

Stretch (working above ARE)

Compare 25-year vs 30-year mortgage on the same house. Which has higher monthly repayment? Which costs more in TOTAL interest paid? Discuss the trade-off — lower monthly payment vs paying more over time.

SEND SEND adaptations

For pupils with dyscalculia: use round numbers (£200k house, 5% rate, 25 years gives a clean monthly figure). Provide the lookup table prominently. For pupils with autism: provide a step-by-step "questions to ask when getting a mortgage" card.

EAL EAL support

Vocabulary: "mortgage", "deposit", "principal", "term", "interest rate", "monthly repayment", "affordability", "secured loan". Sentence frame: "A mortgage of £___ over ___ years at ___% costs £___ per month."

ASSESSMENT Assessment criteria

Pupils can: (1) define mortgage in their own words; (2) name the four key components; (3) calculate a monthly repayment using the lookup table; (4) explain why a bigger deposit usually means a cheaper mortgage.

HOME Homework pack

Four activities to understand UK mortgages. ~30 minutes.

Mortgage vocabulary

What pupils do: Define these 6 terms: deposit, loan-to-value (LTV), fixed-rate mortgage, variable-rate mortgage, mortgage term, repayment vs interest-only.

Expected output: A 6-row vocabulary table.

Marking guidance: 1 mark per accurate definition. 6 marks total.

Deposit calculation

What pupils do: Sarah wants to buy a £250,000 house. She needs at least a 10% deposit. How much is that? How long would she need to save at £400/month? What about at £800/month?

Expected output: Three calculations.

Marking guidance: 2 marks each: £25k deposit, ~62 months at £400, ~31 months at £800. 6 marks total.

Monthly payment

What pupils do: Use an online mortgage calculator: a £200,000 mortgage over 25 years at 5% interest. What's the monthly payment? What's the total cost over 25 years?

Expected output: Two figures + a 2-sentence reflection on total interest cost.

Marking guidance: 2 marks for monthly (~£1,169), 2 marks for total (~£350,000), 2 marks for reflection.

Extension (optional)

What pupils do: What is "Stamp Duty Land Tax" (SDLT)? When does a first-time buyer have to pay it? When don't they? Find the 2026/27 thresholds.

Expected output: A research-based 4-point answer.

Marking guidance: Up to 8 marks for accurate, complete research.

Family discussion prompt (safeguarding-aware)

Ask a working adult: "Did you save up for a house? How long did it take, and what was hardest about it?"

SAFEGUARDING Classroom safeguarding

Note for teachers: Some pupils' families may not own their home — they may rent, live in social housing, or have other arrangements. Frame the lesson neutrally: home ownership is one option, not a requirement or a measure of success. Do not ask pupils about their family's housing situation.

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