Mortgage Calculator
A mortgage repayment is driven by four things: the loan amount, the interest rate, the term, and whether you are repaying the capital or just the interest. This calculator works out your monthly payment, total interest and total amount repaid from those figures, using the same formula lenders themselves use to quote a repayment figure.
Mortgage Repayment Calculator
Calculate your monthly mortgage repayments based on loan amount, rate and term.
The LTV Band That Decides What Rates You Can Even See
Loan-to-value — your mortgage as a percentage of the property price — is one of the most consequential numbers in the whole mortgage process, since it determines which rates you can access at all, not just how much interest you pay on a given rate. Lenders group LTV into bands, and the difference between them is considerable: 60% LTV or below typically unlocks the very best rates on the market, 75% and 80% remain competitive, while 90% and above narrows the field to a smaller number of lenders willing to accept the higher risk, generally at a noticeably higher rate. This calculator shows your specific LTV band alongside the payment figures, since understanding where you sit on this scale matters as much as the raw numbers themselves.
This is worth keeping in mind specifically when deciding how much deposit to put down if you have some flexibility — finding a slightly larger deposit to cross from one LTV band into the next lower one can sometimes unlock a meaningfully better rate, producing a saving well beyond what the extra deposit amount alone might suggest.
Same Loan, Two Rate Tiers
A £270,000 loan at a 60% LTV rate of 4.1% over 25 years produces a monthly payment of roughly £1,440. The identical £270,000 loan at a 90% LTV rate of 5.6% — a realistic gap between the two tiers — rises to roughly £1,674 a month instead, an extra £234 a month, or close to £2,810 a year, purely from sitting in a higher LTV band rather than any difference in the loan amount itself.
Why Interest-Only Isn’t Actually Cheaper, Just Deferred
An interest-only mortgage produces a lower monthly payment than an equivalent repayment mortgage on the same loan, rate and term, since the payment covers only the interest, with none of it reducing the balance owed. This calculator shows both options clearly, but it is worth being explicit about what the lower interest-only payment actually means: the full loan amount remains outstanding at the end of the term, needing to be repaid in full from savings, investments, or selling the property. It is not a cheaper way to buy the same property — it is the same total cost with the capital repayment deferred to the end rather than spread across the term.
The Formula Behind Every Repayment Quote
The standard repayment mortgage calculation is M = P × [r(1+r)ⁿ] / [(1+r)ⁿ−1], where P is the loan amount, r is the monthly interest rate, and n is the total number of monthly payments across the term. On a £200,000 loan at 4.5% over 25 years, this formula produces a monthly payment of approximately £1,112 — the same figure any mortgage lender’s own calculator would produce for an identical loan, rate and term, since this is the standard, universally used formula across the UK mortgage industry, not a simplified approximation.
Understanding that this is a standardised, widely used formula, rather than each lender applying its own proprietary calculation, is genuinely useful — it means a repayment figure quoted by one lender should closely match this calculator’s result for the identical loan, rate and term, making this a reliable way to sense-check any specific quote you receive.
How the Same Deposit Buys Different Rates on Different Prices
LTV is a ratio, not an absolute deposit amount, which means the same cash deposit produces a genuinely different LTV, and therefore a genuinely different rate tier, depending on the property price it is being applied to. A £30,000 deposit on a £150,000 property gives an 80% LTV, while the identical £30,000 deposit on a £300,000 property gives a 90% LTV — the same money, a meaningfully different rate band. This is worth understanding clearly when comparing properties at different price points with a fixed deposit budget, since the mortgage rate available is not simply about how much cash you have saved, but how that cash compares proportionally to what you are borrowing against. Our Mortgage Affordability Calculator is useful for working out how much you could realistically borrow in the first place, and our Compare Two Mortgages calculator lets you set two specific deals side by side once you have narrowed down real options.
Frequently Asked Questions
Does this calculator account for fees on top of the mortgage itself?
No — it calculates the repayment on the loan amount you enter. Product fees, valuation fees and legal costs are separate, additional costs worth budgeting for alongside the monthly repayment figure shown here.
Why does my actual mortgage offer show a different monthly payment?
A lender’s formal offer may reflect a slightly different exact rate, fees added to the loan, or a specific product’s particular terms, any of which can produce a modest difference from this general calculation.
Is a repayment mortgage always the safer choice over interest-only?
For most residential mortgages, yes, since it guarantees the loan is cleared by the end of the term. Interest-only is more commonly used for buy-to-let properties, where the eventual sale of the property, rather than personal savings, is often the intended repayment method.
Does the interest rate stay the same for my whole mortgage term?
Only if you have a genuinely fixed rate for the full term, which is uncommon for the entire mortgage duration — most mortgages are on a fixed or tracker deal for two to five years, after which the rate typically changes to a new deal or the lender’s standard variable rate.
Can I overpay a repayment mortgage to clear it faster?
Many mortgages allow overpayments, often up to 10% of the outstanding balance per year without an early repayment charge, which can meaningfully reduce both the term and total interest paid over the life of the loan.
Important Information
This calculator provides an estimate based on the figures you enter and does not constitute financial advice or a mortgage offer. Actual rates, fees and terms depend on individual lender criteria and a full application. For advice specific to your circumstances, consult a mortgage broker or FCA-regulated adviser. See our Disclaimer for further information.