Mortgage Calculator
Calculate mortgage repayments, total interest cost, and affordability for any property purchase.
Optional Costs
What is Mortgage Calculator?
A mortgage is typically the largest financial commitment an individual or business makes, and understanding exactly how repayments are calculated — and how the total cost changes with different loan terms, deposit sizes, and interest rates — is essential for making informed property decisions. Mortgage calculations follow the same amortisation formula as other loans, but with property-specific considerations: loan-to-value ratio (LTV), deposit requirements, stamp duty (UK) or transfer taxes, and the fact that mortgage rates reset at the end of initial rate periods (typically 2–5 years). This calculator handles residential mortgage scenarios: repayment mortgages (where you pay both principal and interest each month until the mortgage is fully repaid) and interest-only mortgages (where you pay only the interest each month, with the full principal due at the end of the term). It includes tools for comparing different deposit sizes, rate scenarios, and early repayment strategies.
How to Use Mortgage Calculator
- 1
Enter Property and Loan Details
Input the property price, deposit amount (or percentage), mortgage term, and annual interest rate. Select repayment type: capital repayment or interest-only.
- 2
View Monthly Payment and Summary
See your monthly payment, total amount repaid, total interest, LTV ratio, and a year-by-year summary of remaining balance.
- 3
Compare Scenarios
Adjust deposit size, term, or rate to see how changes affect monthly payments and total cost. A slightly larger deposit or shorter term can save tens of thousands in interest.
Use Cases
Property Purchase Affordability
Before viewing properties, calculate the maximum mortgage you can afford based on a monthly payment that fits your budget. Work backwards: if you can afford £1,500/month and the current rate is 4.5% over 25 years, the maximum loan is approximately £270,000. Add your deposit to find your total budget.
Comparing Fixed vs Variable Rate
Compare a 2-year fixed rate at 4.5% against a 5-year fixed at 5.0% by calculating total cost over the full 5-year period including the reversion SVR for the 2-year product. Sometimes paying slightly more for a longer fix provides better total cost certainty.
Remortgaging Decision
When your current mortgage deal expires, calculate your monthly payment at the reversion SVR versus a new fixed rate deal to determine whether remortgaging is worthwhile. Factor in arrangement fees and legal costs against the monthly saving to calculate the break-even point.
Features
Repayment and Interest-Only
Calculates both repayment mortgages (paying off principal and interest) and interest-only mortgages (paying only interest, principal remains constant) — for direct comparison.
LTV and Rate Bands
Shows loan-to-value ratio and indicates typical rate bands available at different LTV levels — helping you understand the deposit-size trade-off between lower rates and higher upfront cost.
Rate Change Scenario
Model what happens when your initial fixed rate expires and reverts to a higher SVR (Standard Variable Rate) — so you can plan for the impact of rate increases on your monthly budget.
Overpayment Impact
Shows how much interest is saved and years removed from the mortgage by making regular or one-time overpayments — the most impactful financial decision available to most homeowners.
Frequently Asked Questions
UK lenders typically offer mortgages of 4–4.5× your annual income as a guideline (e.g. £40,000 salary = £160,000–£180,000 mortgage). Some lenders offer 5× or even 5.5× for high earners or certain professional categories. For joint mortgages, lenders usually use 3–4× combined income. However, actual lending is based on affordability stress tests (can you still afford payments if rates rise by 3%?) rather than simple income multiples. The bigger constraint for most buyers is the deposit requirement: most competitive rates require at least 10–15% deposit (LTV of 85–90%).
LTV is the mortgage loan as a percentage of the property's value. A £200,000 property with a £40,000 deposit has an LTV of 80%. LTV determines your risk profile for lenders — lower LTV (larger deposit) = lower risk = lower interest rate. Rate tiers typically sit at LTV bands: 95%, 90%, 85%, 80%, 75%, and 60%. Moving from 90% LTV to 85% LTV (a 5% larger deposit) can reduce your interest rate by 0.3–0.5%, saving thousands over the mortgage term. The biggest rate improvement typically comes when LTV drops below 60%.
Repayment (capital and interest) mortgage: each payment covers the interest due plus a portion of the principal. After the full term, the mortgage is fully paid off and you own the property outright. Interest-only mortgage: each payment covers only the interest. The principal remains constant throughout the term and must be repaid as a lump sum at the end. Interest-only gives lower monthly payments but requires a credible repayment vehicle (investments, pension lump sum, or property sale) to repay the principal. Most residential mortgages are now repayment mortgages; interest-only is primarily used for investment properties (buy-to-let).
Example: £300,000 property. 5% deposit (£15,000, LTV 95% at 5.5% rate): £1,838/month, total interest over 25 years = £251,400. 20% deposit (£60,000, LTV 80% at 4.5% rate): £1,388/month, total interest = £176,400. The extra £45,000 in deposit saves £451/month and £75,000 in total interest over 25 years — a 167% return on the additional deposit. This is why maximising your deposit is typically the highest-return financial decision available to prospective homebuyers.
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