UK Mortgage Calculator
Monthly repayments, total interest and the loan balance over time — for repayment and interest-only mortgages, with overpayments.
| Component | Amount |
|---|---|
| Loan borrowed | £247,500 |
| Interest over the term | £165,204 |
| Total cost of the mortgage | £412,704 |
How the balance falls
What you still owe at each point of the term, against the interest you have handed over by then — mostly interest at first, mostly capital at the end.
How the payment is worked out
The repayment formula
A repayment mortgage charges the same amount every month, set so the loan hits zero exactly at the end of the term:
M = P × r(1+r)n / ((1+r)n − 1)
P is the loan, r the monthly rate (annual ÷ 12), n the number of months. Early payments are mostly interest; the balance falls slowly at first and quickly at the end — the curve in the chart above.
Repayment vs interest-only
| Aspect | Repayment | Interest-only |
|---|---|---|
| Monthly payment | Higher — capital plus interest | Lower — interest alone |
| At the end of the term | Loan fully repaid | The whole loan is still owed |
| Total interest | Falls every month as the balance shrinks | Fixed — the balance never falls |
Interest-only borrowers need a separate plan to repay the capital — lenders ask for evidence of one.
Overpayments
Anything paid above the normal amount comes straight off the capital, so every later month charges less interest — small regular overpayments compound into years off the term. Most lenders allow 10% of the outstanding balance per year before an early-repayment charge applies; check your deal.
What this calculator leaves out
Product fees, valuation and legal costs, buildings insurance, and Stamp Duty Land Tax are not included — the result is the loan arithmetic only. Rates also change when a fixed deal ends, so treat the total-cost figure as the cost if today’s rate held for the whole term.
Sources: Stamp Duty Land Tax (gov.uk), MoneyHelper mortgage calculator, Bank of England effective rates.
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Frequently asked questions
How is a mortgage payment calculated?
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A repayment mortgage uses the annuity formula M = P·r(1+r)ⁿ/((1+r)ⁿ−1), where P is the loan, r the monthly interest rate and n the number of monthly payments. The payment stays the same, but its mix shifts: early on it is mostly interest, and by the end almost all capital. An interest-only mortgage simply charges P·r each month and leaves the capital untouched.
What is the difference between repayment and interest-only?
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With a repayment mortgage you owe nothing at the end of the term. With interest-only the monthly cost is lower, but the entire loan is still owed when the term ends, so you need a credible plan — savings, investments or a sale — to repay it, and total interest is higher because the balance never falls.
What is loan-to-value (LTV) and why does it matter?
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LTV is the loan as a percentage of the property price — a £247,500 loan on a £275,000 home is 90% LTV. Lenders price by LTV bands: below 90%, 80% and especially 75% and 60%, cheaper rates unlock. A slightly larger deposit that crosses a band can cut the rate on the whole loan.
How much can I save by overpaying my mortgage?
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Every pound overpaid comes off the capital, so all future interest is charged on a smaller balance. On a typical 25-year loan, a regular overpayment of £100 a month removes roughly two to three years from the term and thousands of pounds of interest. Most lenders allow overpaying 10% of the balance per year before early-repayment charges apply.
Does this calculator include stamp duty or fees?
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No — it models the loan arithmetic only. Stamp Duty Land Tax, product and arrangement fees, valuation, legal costs and insurance sit on top. Rates on GOV.UK show the current SDLT bands for your situation, including first-time buyer relief.