Mortgage Calculator
Calculate your monthly mortgage payments, total interest, and total cost of your home loan.
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What Is a Mortgage Calculator?
A mortgage calculator shows your monthly repayment amount before you commit to a home loan. Enter the property price, interest rate, and term length to get an instant breakdown of costs. Use these figures to compare deals from different lenders side by side.
Most UK mortgages run for 25 to 35 years. Even a 0.25% rate difference on a £250,000 loan changes total interest by thousands of pounds. This calculator applies the standard amortisation formula used by banks and building societies.
Run multiple scenarios with different deposit sizes and term lengths. A larger deposit reduces both monthly payments and total interest. A shorter term costs more each month but saves significantly over the life of the loan.
How Do You Use This Mortgage Calculator?
Enter your loan amount, annual interest rate, and loan term in years. Click Calculate to see your monthly payment, total interest paid, and total loan cost.
- Enter the total property price or loan amount in pounds.
- Input the annual interest rate offered by your lender.
- Select the mortgage term in years (typically 25 or 30).
- Click Calculate to generate your monthly repayment figure.
- Review the total interest and total cost breakdown.
- Adjust the inputs to compare different mortgage scenarios.
How Does the Mortgage Calculator Formula Work?
The formula used: M = P[r(1+r)^n] / [(1+r)^n - 1] where P = principal, r = monthly rate, n = number of payments
The mortgage payment formula calculates equal monthly instalments that repay both principal and interest over the full term.
M = P[r(1+r)^n] / [(1+r)^n - 1]
P is the loan principal (amount borrowed). r is the monthly interest rate (annual rate divided by 12). n is the total number of monthly payments (term in years multiplied by 12). The formula ensures each payment covers that month's interest charge plus a portion of the outstanding balance.
What Are Some Example Calculations?
For a £250,000 mortgage at 4.5% over 25 years: Monthly payment = £1,389.58. Total interest = £166,875. Total cost = £416,875.
First-time buyer with a £200,000 mortgage at 5.0% over 25 years
r = 0.05/12 = 0.004167. n = 300. M = 200000 × 0.004167 × 1.004167^300 / (1.004167^300 - 1)
Monthly payment = £1,169.18. Total interest = £150,754. Total repayment = £350,754.
Remortgage of £150,000 at 3.75% over 20 years
r = 0.0375/12 = 0.003125. n = 240. M = 150000 × 0.003125 × 1.003125^240 / (1.003125^240 - 1)
Monthly payment = £889.20. Total interest = £63,408. Total repayment = £213,408.
Buy-to-let mortgage of £300,000 at 5.5% over 30 years
r = 0.055/12 = 0.004583. n = 360. M = 300000 × 0.004583 × 1.004583^360 / (1.004583^360 - 1)
Monthly payment = £1,703.37. Total interest = £313,213. Total repayment = £613,213.
When Should You Use a Mortgage Calculator?
Use this mortgage calculator before viewing properties to set a realistic budget. Compare monthly payments across different loan amounts and interest rates. Run the numbers again when you receive a formal mortgage offer to verify the lender's quoted figures.
Revisit the calculator at remortgage time. Enter your remaining balance and the new rate to see whether switching lenders saves money after early repayment charges. Check how overpayments reduce total interest by entering a shorter term.
What Do These Terms Mean?
How Do the Options Compare?
| Feature | Fixed Rate Mortgage | Variable Rate Mortgage |
|---|---|---|
| Monthly payment | Stays the same for the fixed period | Changes when the lender adjusts its rate |
| Typical initial rate | Higher than variable at outset | Often lower starting rate |
| Rate risk | None during fixed period | Payments rise if base rate increases |
| Early repayment charges | Usually apply during fixed term | Often none or lower charges |
| Budgeting | Predictable monthly costs | Harder to plan long-term spending |
| Best for | Buyers who want payment certainty | Buyers expecting rates to fall or planning to move soon |
What Are the Best Tips to Know?
- Compare at least three lender offers using the same loan amount and term for a fair comparison.
- Add £200-£300 to your calculated payment as a buffer for rate increases on variable deals.
- Factor in additional costs such as stamp duty, solicitor fees, and surveys before setting your budget.
- Use the calculator to test overpayment scenarios by reducing the term length.
- Remember that the advertised rate and your offered rate may differ based on your credit profile.
What Mistakes Should You Avoid?
- Forgetting to include the deposit when entering the loan amount — enter only the amount borrowed.
- Confusing the initial fixed rate with the lender's standard variable rate that follows.
- Ignoring additional monthly costs such as buildings insurance and service charges.
- Comparing mortgage deals by monthly payment alone without checking total interest over the full term.
Frequently Asked Questions
How is a mortgage payment calculated?
Mortgage payments use the amortisation formula, which accounts for the loan principal, interest rate, and term to determine equal monthly payments that cover both interest and principal repayment.
Should I choose a fixed or variable rate mortgage?
Fixed rates provide payment certainty, while variable rates may start lower but can change. Consider your risk tolerance and how long you plan to stay in the property.
How much can I borrow for a mortgage?
Lenders typically offer 4 to 4.5 times your annual income. Your actual borrowing power depends on credit score, existing debts, deposit size, and the lender's criteria.
What deposit do I need for a mortgage in the UK?
Most lenders require a minimum 5% deposit. A 10% deposit opens more deals at better rates. A 25% deposit typically unlocks the lowest available interest rates.
How does the mortgage term affect total cost?
A shorter term means higher monthly payments but less total interest. A 25-year £200,000 mortgage at 5% costs £150,754 in interest. The same loan over 35 years costs £219,388 in interest.
Can I overpay my mortgage?
Most lenders allow overpayments of up to 10% of the outstanding balance per year without penalty. Overpaying reduces total interest and shortens the term. Check your mortgage terms for any early repayment charges.
What fees are involved in getting a mortgage?
Expect to pay an arrangement fee (£0-£2,000), valuation fee (£150-£1,500), solicitor fees (£500-£1,500), and potentially a mortgage broker fee. Some lenders offer fee-free products at a slightly higher rate.
What happens when my fixed rate ends?
Your mortgage moves to the lender's standard variable rate (SVR), which is usually 1-2% higher. Remortgage to a new deal before the fixed period ends to avoid paying the SVR.
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