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How to Use the Mortgage Calculator
- Enter the property value — type the full purchase price of the property you are considering. This is the asking price or the price you intend to offer.
- Enter your deposit — type the amount you plan to put down as a deposit. The calculator will subtract this from the property value to determine your loan amount.
- Set the interest rate — enter the annual interest rate as a percentage. If you are comparing deals, try different rates to see how they affect your monthly payment.
- Choose the term length — use the slider to select your mortgage term in years. Common terms are 25 or 30 years, but you can choose anywhere from 5 to 35 years.
- Select the repayment type — choose "Repayment" to pay off the mortgage in full by the end of the term, or "Interest Only" to pay only the interest each month.
- Click "Calculate" — the calculator displays your monthly repayment, total amount repaid, total interest, and LTV ratio.
- View the amortisation schedule — for repayment mortgages, click "Show year-by-year breakdown" to see how principal and interest payments change over the life of the mortgage.
How Mortgage Repayments Work
Repayment mortgages use the standard annuity formula to calculate fixed monthly payments: M = P x [r(1+r)^n] / [(1+r)^n - 1], where P is the principal loan amount, r is the monthly interest rate (annual rate divided by 12), and n is the total number of monthly payments (term in years multiplied by 12). This formula ensures that each monthly payment is identical throughout the term, but the composition of each payment changes over time. In the early years, the majority of each payment goes toward interest because the outstanding balance is large. As the balance decreases, more of each payment goes toward reducing the principal. This gradual shift from interest-heavy to capital-heavy payments is called amortisation. By the final payment, nearly the entire amount goes toward capital, and the mortgage is fully repaid. An interest-only mortgage is simpler: each monthly payment equals the loan amount multiplied by the monthly interest rate. The balance never decreases, and the full loan must be repaid at the end of the term through other means such as savings, investments, or the sale of the property. The LTV (Loan to Value) ratio is calculated by dividing the loan amount by the property value and expressing it as a percentage. Lower LTV ratios generally qualify for better interest rates from lenders.
How is a mortgage repayment calculated?
Repayment mortgages use the annuity formula: M = P x [r(1+r)^n] / [(1+r)^n - 1], where P is the loan amount, r is the monthly interest rate (annual rate divided by 12), and n is the total number of monthly payments. This formula produces a fixed monthly payment that covers both interest and principal, ensuring the mortgage is fully paid off by the end of the term.
What is LTV and why does it matter?
LTV stands for Loan to Value and represents your mortgage as a percentage of the property value. For example, a £180,000 mortgage on a £200,000 property gives an LTV of 90%. LTV matters because lenders use it to assess risk. Lower LTV ratios (meaning larger deposits) typically qualify for lower interest rates, which can save you thousands over the life of the mortgage. Most lenders require a minimum deposit of 5-10%.
What is the difference between repayment and interest-only?
With a repayment mortgage, each monthly payment includes both interest and a portion of the capital. By the end of the term, the entire loan is paid off and you own the property outright. With an interest-only mortgage, you only pay the interest each month, so the loan balance never decreases. You must repay the full original loan amount at the end of the term, typically through savings, investments, or selling the property.
How does the interest rate affect my monthly payment?
Even small changes in interest rate can significantly affect your monthly payment and total interest paid. For example, on a £200,000 mortgage over 25 years, the difference between a 4% and 5% rate is roughly £120 per month, which adds up to over £36,000 in additional interest over the full term. This is why comparing rates from different lenders and considering fixed vs variable rates is so important.
What is an amortisation schedule?
An amortisation schedule is a year-by-year (or month-by-month) table showing how each payment is split between interest and capital, and how the remaining balance decreases over time. In the early years, most of each payment goes toward interest. As the balance falls, the interest portion shrinks and more goes toward paying off the principal. Our calculator generates a year-by-year schedule for repayment mortgages so you can see this progression clearly.
How much deposit do I need for a UK mortgage?
Most UK lenders require a minimum deposit of 5% of the property value, though some government schemes may allow lower deposits. However, a larger deposit reduces your LTV ratio and typically qualifies you for lower interest rates. A 10% deposit is common for first-time buyers, while 15-20% or more can unlock the most competitive rates. The deposit also affects the total interest you pay over the life of the mortgage.
What happens if I make overpayments?
Most UK mortgages allow you to overpay by up to 10% of the outstanding balance each year without penalty. Overpayments reduce the principal faster, which means less interest accrues in future months. Even small regular overpayments can shorten your mortgage term by several years and save thousands in interest. Check your mortgage terms for any early repayment charges before making large overpayments.
What's the difference between a fixed-rate and tracker mortgage?
Fixed-rate locks your monthly payment for the fix period (usually 2, 3, 5 or 10 years). Tracker follows the Bank of England base rate plus a margin — lower starting rate but payments change when base rate changes. Fix for certainty, track for potential saving when rates fall.
Can I use this calculator for buy-to-let?
Yes for the maths, but remember BTL mortgages are usually interest-only — meaning every monthly payment is pure interest, the capital stays at £250k forever until you sell or remortgage to repayment. Enable the 'interest only' option if available, or mentally adjust.
How does overpaying reduce my mortgage?
Every extra pound you pay comes straight off the capital, which means less interest accrues on all future months. £200/month overpayment on a 25-year £250k mortgage at 4.5% cuts the term by about 5 years and saves £42k in total interest.
Ready to compare mortgage rates?
Use our calculator as a guide, then compare real rates from UK lenders:
* External links. daytics may earn a small commission if you apply through some links, at no extra cost to you.
Worked Example: £250,000 Mortgage Over 25 Years at 4.5%
A couple buys a £312,500 home with a £62,500 deposit (20%), taking a £250,000 mortgage on a 25-year term at a 4.5% fixed rate. Their monthly repayment works out to £1,390.
Over 25 years that's £416,929 paid back in total — £166,929 of which is interest. In year 1, they pay about £11,138 in interest and only £5,542 toward the principal. By year 15 the ratio reverses; by year 25 almost every pound of the monthly payment is principal.
If they could overpay £200/month, the term drops to 19 years 8 months and they save roughly £42,000 in lifetime interest. This is why the amortisation schedule — showing the interest/principal split each month — is more useful than just the monthly figure.
Common Scenarios
Fixed vs tracker. A 5-year fix at 4.5% gives certainty. A tracker at base-rate + 0.5% starts lower (3%) but moves with Bank of England rate decisions. For early 2026 the rule of thumb is: fix if you value certainty and the gap is small; track if you expect rates to fall.
Buy-to-let. BTL mortgages typically require 25% deposit, have higher rates (0.5-1.0% above residential), and are often interest-only — meaning the monthly figure is much lower but you still owe the full £250k at the end.
Remortgage at end of fix. If you fixed at 1.8% in 2021 and that's ending in 2026 at 4.5%, a £250k mortgage's monthly payment jumps from about £1,037 to £1,390 — £353/month more or £4,236 extra per year.
Joint affordability. UK lenders typically lend 4.5× joint income. A couple earning £60k+£40k = £100k can borrow up to ~£450k, though affordability tests based on actual outgoings usually cap this lower.
UK Mortgage Rates April 2026 (Typical Best Buys)
| Deal Type | Typical Rate | Notes |
|---|---|---|
| 2-year fix (60% LTV) | 4.2% | Lowest-risk borrower |
| 5-year fix (60% LTV) | 4.4% | Medium-term certainty |
| 2-year fix (90% LTV) | 4.9% | Higher LTV = higher rate |
| 5-year fix (90% LTV) | 5.0% | First-time buyer typical |
| Tracker (base + 0.5%) | 5.0% (base 4.5%) | Moves with BoE rate |
| Standard Variable (SVR) | 7.5% avg | What you drop onto post-fix |
| Buy-to-let 2yr fix | 5.1% | 75% LTV, interest-only |
The Bank of England base rate was 4.5% at the last MPC meeting; rates here are illustrative April 2026 best-buys.
Common Mistakes
The biggest practical mistake is letting a fix expire and dropping onto the lender's SVR — adding roughly 3% overnight, which on £250k is about £600/month extra. Always remortgage six months before a fix ends; lenders let you lock a new rate without any penalty. A second error is comparing only monthly cost without looking at total cost: a 2-year fix with low rate but £995 product fee often costs more than a fee-free 2-year fix at a slightly higher rate. Third: overpayment penalties during a fix — typical 10% annual overpayment allowance. Pay £20k extra into a £200k mortgage and you'd owe early-repayment charges on the excess. Fourth: buy-to-let mortgages are usually interest-only, meaning the capital never reduces; investors sometimes forget this and are surprised by the full £250k still owed at the end of the term.
