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Mortgage Calculator

Calculate monthly payments, total interest, and affordability for UK mortgages.

£
£
%
%
yrs

Monthly Payment

£1,658.04

per month for 25 years

Total Repayable

£497,412.00

Total Interest

£227,412.00

Loan-to-Value

Good LTV

Standard rates apply

90%

Loan Amount£270,000.00
Number of Payments300

Estimates only. Actual mortgage terms may vary. Consult a professional for personalised advice. FCA Mortgage Guide

Amortisation Schedule

Year-by-year breakdown of principal and interest payments over the mortgage term.

YearOpening BalancePrincipal PaidInterest PaidClosing Balance
01£270,000.00£5,175.66£14,720.82£264,824.34
02£264,824.34£5,467.60£14,428.88£259,356.74
03£259,356.74£5,776.02£14,120.46£253,580.72
04£253,580.72£6,101.83£13,794.65£247,478.88
05£247,478.88£6,446.03£13,450.45£241,032.86

Note · The opening balance of each year matches the closing balance of the previous year. In the final year (Year 25), your mortgage will be fully paid off, with the closing balance reaching £0.

Disclaimer: This calculator provides estimates only. Actual mortgage terms may vary based on your individual circumstances, credit rating, and lender requirements. This tool does not constitute financial advice. Always consult with a qualified mortgage adviser or financial professional before making any mortgage decisions. For official guidance, visit the FCA Mortgage Guide.

What this mortgage calculator does

The UK mortgage calculator computes monthly capital-and-interest repayments for a residential mortgage using the standard annuity formula that lenders authorised under the FCA's MCOB sourcebook apply to repayment products. Enter the loan amount, term in years, annual interest rate, and an optional regular overpayment; the tool returns the monthly payment, total interest over the term, the loan-to-value (LTV) band, a year-by-year amortisation schedule, and — where overpayments are added — a revised payoff date.

The model assumes a fully amortising repayment mortgage at a single rate for the whole term. It does not represent interest-only products, multi-stage fixed-then-SVR schedules, or product fees. Results are estimates intended to inform conversations with a broker or lender, not a regulated affordability decision.

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When to use it

The calculator handles three planning moments — first purchase at 90% LTV, remortgage at the end of a fix, and overpayment against a £200,000+ balance. First-time buyers can compare how a larger deposit reshapes the monthly payment and the total interest bill — for example, the gap between a 90% and a 75% LTV on the same property. Remortgagers approaching the end of a fixed deal can model what a fresh rate would cost before shopping the market, avoiding the lender's standard variable rate (SVR) by default. Existing borrowers can test whether a lump-sum payment or a regular overpayment shortens the term more effectively for their loan.

The tool is also useful for affordability sense-checks ahead of a Decision in Principle, though it is not a substitute for the lender's own affordability assessment carried out under the FCA's MCOB 11 rules.

Worked examples

Example 1 — First-time buyer. A buyer purchasing at £250,000 with a 10% deposit borrows £225,000 at a 4.75% fixed rate over 30 years — a 90% LTV. The annuity formula returns a monthly capital-and-interest payment of approximately £1,173 and total interest of approximately £197,500 across the full term, assuming the rate holds. Rates in this band were typical of higher-LTV UK fixes during 2024-25 against the Bank of England Bank Rate.

Example 2 — Remortgage. A borrower with £180,000 outstanding and 18 years left moves from a 5.5% standard variable rate to a 4.25% five-year fix. The monthly payment drops from approximately £1,315 to approximately £1,194 — a saving of about £121 a month, or roughly £7,250 across the five-year fix. The SVR figure reflects the 2–4 percentage-point premium lender SVRs typically carry over comparable fixes per MoneyHelper.

Example 3 — Overpayment. A £200,000 loan at 4.5% over 25 years carries a baseline payment of about £1,112 a month. Adding a regular £150/month overpayment shortens the term by roughly 4 years 11 months and reduces total interest by approximately £29,000 — subject to the lender's overpayment allowance (typically 10% of the balance per year per MoneyHelper's overpayment guidance) and any early repayment charge.

Each example assumes a single rate for the whole term, no product or arrangement fees, and monthly compounding.

Key concepts to understand

Loan-to-Value (LTV). The loan divided by the property value as a percentage. UK lenders price in tiers — typically 60%, 75%, 85%, 90%, and 95% — with rates falling as the LTV bracket falls. A £225,000 loan on a £250,000 home is 90% LTV.

Fix term. The introductory period during which the rate is locked — commonly 2, 3, 5, or 10 years. At the end of the fix the loan reverts to the lender's standard variable rate (SVR) unless the borrower remortgages or switches product.

Early Repayment Charge (ERC). A fee for redeeming the mortgage or overpaying above the annual allowance during a fix. The exact taper is disclosed in the lender's offer document under FCA MCOB rules on disclosure and typically falls from a higher percentage in the first year of a fix toward a lower percentage in the final year.

Standard Variable Rate (SVR). The lender's default rate once the introductory deal ends. SVRs typically sit 2–4 percentage points above market fixes per MoneyHelper guidance, which is why most borrowers remortgage at the end of a fix rather than letting the loan revert.

Capital vs interest. Each monthly payment splits between interest on the outstanding balance and capital repayment. Early in a long term the split is heavily interest-weighted; later years repay proportionally more capital. The amortisation schedule above visualises this curve year by year.

How is mortgage interest calculated?

UK lenders typically calculate interest daily on the outstanding balance and charge it monthly, which is why an overpayment cuts future interest immediately rather than at year-end. The standard repayment formula is the annuity equation — payment = P × r × (1 + r)^n / ((1 + r)^n − 1), where P is the loan, r the monthly rate, and n the number of months. Applied to a £225,000 loan at 4.75% over 360 months, it returns approximately £1,173 per month.

How do fixed and tracker mortgages differ?

A fix locks the rate (commonly 2, 5, or 10 years) and protects against rises but typically carries an early repayment charge; a tracker follows the Bank of England Bank Rate plus a margin, so payments move with each rate decision and many trackers permit penalty-free overpayments. MoneyHelper offers an independent, government-backed comparison covering both product types.

Sources and regulators

The calculator is grounded in UK-specific authorities: the Bank of England's official Bank Rate page (the headline rate that drives tracker mortgages and influences fix pricing), the FCA's MCOB sourcebook (the conduct rules lenders follow on affordability and disclosure), and MoneyHelper's free mortgage guidance (independent, government-backed).

The calculator is an information tool, not regulated advice. Anyone arranging a mortgage should speak to an FCA-authorised broker or lender.

Frequently asked questions

How much deposit do I need for a UK mortgage?

Most UK lenders require a minimum deposit of 5-10% of the property price, though first-time buyers may access government schemes requiring as little as 5%. However, a larger deposit of 15-20% typically secures significantly better interest rates and lower monthly payments. The deposit percentage directly affects your Loan-to-Value (LTV) ratio - a key factor lenders use to determine your rate. For example, borrowers with a 20% deposit (80% LTV) often receive rates 0.5-1% lower than those with just a 10% deposit (90% LTV). Additionally, some lenders offer premium rates for deposits of 40% or more. Saving a larger deposit not only reduces your borrowing costs but also provides more choice among lenders.

What is a good mortgage interest rate in the UK?

As of 2024, competitive UK mortgage rates range from 4-6% for fixed-rate mortgages, though rates fluctuate with the Bank of England base rate. Rates below 4.5% are considered excellent in the current market. Your actual rate depends on several factors: your LTV ratio (lower LTV = better rates), credit score, mortgage term, and whether you choose a fixed or variable rate. For example, a borrower with a 75% LTV and excellent credit might secure rates around 4%, while someone with 90% LTV might pay 5.5% or more. Two-year fixed rates are often cheaper than five-year fixes, but longer terms provide more certainty. Always compare rates across multiple lenders and consider using a mortgage broker to access exclusive deals.

How does LTV affect my mortgage rate?

Loan-to-Value (LTV) is the percentage of the property price you are borrowing, calculated as (loan amount ÷ property price) × 100. LTV is one of the most important factors determining your interest rate because it represents the lender's risk. Lower LTV means you have more equity and are less likely to default. Lenders typically offer rate bands: under 60% LTV gets the best rates, 60-75% LTV is very competitive, 75-85% LTV receives standard rates, and above 85% LTV faces higher rates. The difference can be significant - moving from 90% LTV to 75% LTV might save you £100-200 per month on a £250,000 mortgage. This calculator shows your LTV ratio with color-coded indicators to help you understand your position.

What is the maximum mortgage term in the UK?

The maximum mortgage term in the UK is typically 40 years, though most lenders offer terms between 25-35 years. Longer terms reduce your monthly payments but significantly increase the total interest paid over the life of the mortgage. For example, a £200,000 mortgage at 5% over 25 years costs £1,169 per month (£150,700 total interest), while the same mortgage over 40 years costs £966 per month but £263,680 total interest - over £112,000 more. Longer terms can help first-time buyers afford monthly payments but should be balanced against total cost. Many borrowers choose shorter terms (15-20 years) to save on interest if they can afford higher monthly payments. Your age also affects available terms, as lenders typically require mortgages to be repaid by age 70-75.

Can I make overpayments on my mortgage?

Yes, most UK mortgages allow overpayments, but limits and charges vary by lender and mortgage type. The standard allowance is 10% of the outstanding balance per year without penalty, though some lenders allow more. Making regular overpayments can dramatically reduce both your mortgage term and total interest paid. For instance, overpaying £200 per month on a £270,000 mortgage at 5.5% over 25 years could save approximately £38,000 in interest and clear the mortgage 3-4 years earlier. However, check your mortgage terms carefully - exceeding the overpayment limit may incur early repayment charges (ERCs) of 1-5% of the overpaid amount. This calculator shows the impact of overpayments and warns if you exceed typical limits. Tracker and variable rate mortgages often allow unlimited overpayments without penalty.

What are early repayment charges?

Early repayment charges (ERCs) are fees lenders charge if you pay off your mortgage early or overpay beyond the allowed limit, typically during a fixed-rate period. ERCs compensate lenders for lost interest and usually range from 1-5% of the outstanding balance, decreasing over time. For example, a mortgage might charge 5% ERC in year 1, 4% in year 2, reducing to 1% in year 5. On a £250,000 mortgage, a 3% ERC would be £7,500 - a substantial penalty. ERCs typically only apply during the initial deal period (usually 2-5 years); once you move to the lender's standard variable rate, you can usually repay without penalty. Always check your mortgage offer for ERC details before making large overpayments or remortgaging. Some mortgages have no ERCs but may offer less competitive rates.

How much can I borrow for a UK mortgage?

UK lenders typically allow you to borrow 4-4.5 times your annual gross income, though some may offer up to 5-6 times for high earners or certain professions. However, borrowing capacity depends on affordability assessments that consider your income, existing debts, living costs, and future interest rate rises. For example, someone earning £50,000 might borrow £200,000-£225,000, but monthly debt payments of £500 could reduce this significantly. Couples combine their incomes - two earners on £35,000 each could potentially borrow £315,000-£350,000. Lenders stress-test affordability by calculating if you could still afford payments if rates increased by 2-3%. Self-employed applicants often need 2-3 years of accounts and may face stricter criteria. Use this calculator to determine realistic monthly payments before applying.

What is an amortisation schedule?

An amortisation schedule is a year-by-year breakdown showing how your mortgage payments are split between principal (paying off the loan) and interest charges. In the early years, most of your payment goes toward interest, with only a small portion reducing the principal. Over time, this reverses - by the final years, most of your payment reduces the principal. For example, on a £270,000 mortgage at 5.5% over 25 years, year 1 payments include approximately £14,800 interest and £5,000 principal, while year 25 includes just £900 interest and £18,900 principal. Understanding your amortisation schedule helps you see equity build-up and plan overpayments strategically. This calculator generates a complete schedule showing your exact principal and interest breakdown for every year, which you can export to CSV for analysis.