Hi, I'm 7 months into a 24 month contract... I think (could be 18)

Pay £30 a month for what I need and have a Satio, on 3.
Cashback sites give £150 for Satio's that work, and Apple sell it for £500 (or £485 after Quidco)

Assuming I don't get Quidco (takes a while to recieve) the cost of the handset minus what I'd get from Fonebank for mine plus the monthly tariff for 17 months is £860.

Is this cheap or expensive for an iPhone?

Given that you're going to buy the iPhone SIM-free, the monthly tariff doesn't really need to factor into your calculations: you're going to pay that anyway for the next 11/17 months. So effectively you're getting the iPhone for £500 - £150 = £350, which is not a bad price at all.

That said, you don't say what sort of tariff you're on at the moment. If you don't have a decent data allowance (at least 500MB/month), you will find yourself hit with data charges which also need to factor in to your calculations. The iPhone, like all modern smartphones, works best when you don't have to worry about how much data you're downloading...