How to use the Mortgage Calculator
- 1 Enter the property price and your deposit.
- 2 Enter the interest rate from the mortgage deal you are looking at.
- 3 Enter the mortgage term in years, often 25 to 35.
- 4 Choose repayment or interest only, then read the monthly payment and total interest.
Worked example
£300,000 home, £30,000 deposit, 4.5% over 25 years. The loan is £270,000, which is 90% loan-to-value. On a repayment mortgage the monthly payment is about £1,500.75, with about £180,224 of interest over 25 years. On interest only the payment is £1,012.50, but the £270,000 is still owed at the end.
Features
Repayment or interest only
Compare a repayment mortgage, which clears the debt, with interest-only, where the full loan is still owed at the end.
Deposit and loan-to-value
See the deposit as a percentage of the price, the figure lenders use to set rates.
Total cost
The total interest over the term shows how much a longer mortgage really costs.
When to use it
First-time buyers
Test different prices and deposits to see what monthly payment you can manage.
Remortgaging
Enter your remaining balance as the price, with no deposit, and the new deal's rate to compare payments.
Term length
See how stretching from 25 to 35 years lowers the payment but adds a lot of interest.
Rate rises
Check the payment at your current rate and at a higher rate before your fixed deal ends.
Frequently asked questions
How is a UK mortgage payment calculated?
For a repayment mortgage it uses the standard formula: loan × r ÷ (1 − (1 + r)^−n), where r is the annual rate divided by 12 and n the number of monthly payments.
What is loan-to-value (LTV)?
The loan as a percentage of the property value. A £270,000 loan on a £300,000 home is 90% LTV. Lower LTVs usually get better rates.
Does this include stamp duty or fees?
No. Stamp Duty Land Tax, arrangement fees, legal costs and surveys are paid separately when you buy.
What is an interest-only mortgage?
You pay only the interest each month, so payments are lower, but the full loan must be repaid at the end of the term, usually from savings or the sale of the property.
Why does my lender's figure differ slightly?
Lenders may calculate interest daily or add fees to the loan. Use this result as an estimate and check the illustration from your lender.
How big a deposit do I need?
Most lenders ask for at least 5% to 10% of the price. A bigger deposit lowers the loan-to-value, which usually unlocks cheaper rates and a smaller monthly payment, and it also reduces the total interest you pay over the term.
Results are estimates based on the official rates linked above. Confirm important figures with the issuing authority or a qualified adviser before you act on them.
Reviewed by ToolsUnlocked Team · Last updated