How to use the UK mortgage calculator
Enter the price of the home, your deposit as a percent of the price, the term and the interest rate to see your monthly mortgage repayment in pounds. The calculator also shows the interest-only payment, the total interest and the date the mortgage ends. Turn on taxes and costs to see the full monthly cost of owning the home, and add overpayments to see how much sooner you would be mortgage-free.
Repayment or interest-only
A repayment mortgage pays off interest and part of the loan every month, so you owe nothing at the end of the term. An interest-only mortgage covers just the interest: the monthly payment is lower, but the whole loan is still owed at the end and has to be repaid from savings, investments or the sale of the home.
UK mortgage repayment formula
The monthly repayment is M = P × r ÷ (1 − (1 + r)−n), where P is the loan, r the yearly rate ÷ 12 and n the number of months. The interest-only payment is P × r.
UK mortgage example
A £500,000 home with a 25% deposit leaves a £375,000 mortgage, a loan to value of 75%. At 5% over 25 years the repayment is £2,192.21 a month, and you pay £282,663.80 in interest over the term. On an interest-only basis the payment would be £1,562.50, but the full £375,000 would still be owed after 25 years, and the interest alone would come to £468,750.00.
With council tax and other taxes of 1.2% a year, insurance of £2,500 and £6,000 of other yearly costs, the total monthly cost is £3,400.55. Overpaying £200 a month clears the mortgage in 21 years and 3 months instead of 25 years and saves £48,452.78 of interest.
Monthly repayment by rate and term
| Rate | 20 years | 25 years | 30 years | 35 years | Interest-only |
|---|---|---|---|---|---|
| 4% | £2,272.43 | £1,979.39 | £1,790.31 | £1,660.41 | £1,250.00 |
| 5% | £2,474.83 | £2,192.21 | £2,013.08 | £1,892.58 | £1,562.50 |
| 6% | £2,686.62 | £2,416.13 | £2,248.31 | £2,138.21 | £1,875.00 |
For a £375,000 mortgage.
Repayment by deposit
| Deposit | Loan to value | Mortgage | Monthly repayment |
|---|---|---|---|
| £25,000 (5%) | 95% | £475,000 | £2,776.80 |
| £50,000 (10%) | 90% | £450,000 | £2,630.66 |
| £75,000 (15%) | 85% | £425,000 | £2,484.51 |
| £125,000 (25%) | 75% | £375,000 | £2,192.21 |
| £200,000 (40%) | 60% | £300,000 | £1,753.77 |
For a £500,000 home at 5% over 25 years. In practice a lower loan to value also gets a lower rate, so the gap is usually bigger.
Key terms
- Deposit is the part of the price you pay upfront. A bigger deposit usually gets a lower rate.
- Loan to value (LTV) is the loan as a share of the price. A 25% deposit means a 75% LTV.
- Fixed rate deals keep the rate for 2, 5 or 10 years, then move to the lender's standard variable rate unless you remortgage.
- Stamp Duty Land Tax is paid once when you buy in England and Northern Ireland, with similar taxes in Scotland and Wales. It is not part of the monthly payment.
UK mortgage repayment in Excel
=PMT(5%/12,300,-375000) returns the repayment of £2,192.21, and =375000*5%/12 the interest-only payment of £1,562.50.
Related calculators
The amortization calculator builds a full schedule with extra payments, and the mortgage payoff calculator compares ways to pay a mortgage off early. To weigh owning against renting, use the rent vs. buy calculator.