Understanding your mortgage

A mortgage is a loan secured against a property. You agree to repay the lender over a specified period, usually through monthly payments.

With a repayment mortgage, each payment covers interest and repays part of the amount borrowed, known as the capital. If you make all required payments under the agreed terms, the mortgage should be fully repaid by the end of the repayment period.

With an interest-only mortgage, the regular payments cover interest without repaying the original borrowing. You need a separate repayment plan to clear the outstanding capital when the mortgage ends.

This calculator models a repayment mortgage. Its results should not be used as an interest-only mortgage estimate.

What the calculator shows

The calculator uses your property price, deposit, annual interest rate, mortgage term and first repayment date to estimate:

• Your deposit amount and deposit percentage.
• The mortgage amount and loan-to-value ratio (LTV).
• Your regular monthly mortgage repayment.
• Total mortgage repayments and interest.
• A repayment schedule showing how your balance reduces.
• An annual breakdown of capital and interest.
• The effect of optional monthly and one-off overpayments.
• Estimated interest savings and repayment time saved.
• A monthly housing-cost estimate including any optional ownership costs entered.

You can view the original and overpayment scenarios, print the results, save them as a PDF through your browser or download the selected repayment schedule as a CSV file.

The figures that affect your repayments

Property price and mortgage amount

For a straightforward purchase, your mortgage amount is the property price minus your deposit:

Mortgage amount = Property price − Deposit

For example, a £250,000 property with a £25,000 deposit requires a £225,000 mortgage before any fees or additional borrowing.

The calculator derives borrowing from these two inputs, so check that the mortgage amount shown matches the amount you intend to borrow.

Deposit

Your deposit is the money you contribute towards the purchase. You can enter it as either an amount or a percentage of the property price.

A larger deposit reduces the amount borrowed. It also lowers your LTV, which may give you access to more competitive mortgage deals, depending on the lender and your circumstances.

Loan-to-value ratio (LTV)

LTV shows the mortgage amount as a percentage of the property price:

LTV = Mortgage amount ÷ Property price × 100

A £225,000 mortgage on a £250,000 property has an LTV of 90%.

The calculator uses your entered property price for this calculation. LTV is a useful comparison figure, but it does not establish lending eligibility.

Interest rate

The interest rate determines the cost of borrowing. With the same mortgage amount and repayment term, a higher rate means a higher monthly repayment and more interest overall.

Enter the annual mortgage interest rate. The calculator assumes this rate stays unchanged throughout the full repayment term.

Mortgage term

The mortgage term is the time allowed to repay the loan.

A longer term generally lowers monthly repayments because the borrowing is spread over more payments. However, if the interest rate remains the same, you will normally pay more interest overall.

A shorter term usually increases the monthly repayment but reduces the total interest cost.

Mortgage term versus fixed-rate period

Your mortgage term and fixed-rate period are different.

For example, a mortgage could have a 25-year repayment term and a five-year fixed-rate deal. After five years, around 20 years of repayments would remain, but the interest rate could change.

Common UK interest-rate arrangements include:

Using one rate for the whole mortgage term helps you compare scenarios. It does not predict the rates you will receive in future deals.

How to use the mortgage calculator

1. Select your currency. Choose GBP for a UK mortgage. EUR and USD are also available. Currency selection changes formatting only; it does not convert amounts or apply local mortgage rules.
2. Enter the property price. Use the purchase price you want to model.
3. Choose your deposit input. Select deposit amount or deposit percentage and complete the displayed field.
4. Enter the mortgage details. Add the annual interest rate, term in whole years and first repayment date.
5. Add optional overpayments. Enter a monthly amount, a one-off amount with its date, or both.
6. Include optional ownership costs. Enter relevant tax, insurance and service-charge figures using the units shown beside each field.
7. Calculate and compare. Review the original estimate and any revised overpayment results.
8. Explore the repayment schedule. View the first 12 payments, then reveal further groups. Scenario controls keep the schedule and annual chart on the same estimate.
9. Save your results. Use Print / Save as PDF to open your browser’s print dialogue, or download the selected schedule as a CSV file.

Example: buying a £250,000 home

Suppose you buy a property for £250,000 with a £25,000 deposit. Your mortgage would be £225,000, with an LTV of 90%.

At an illustrative annual interest rate of 4.5%, the estimated costs are:

Choosing 30 years reduces the monthly repayment by around £111, but adds approximately £35,228 in interest over the full term.

This illustrates why it helps to compare both monthly affordability and total borrowing cost.

The example assumes a constant 4.5% rate, no fees and no overpayments. It is not a current mortgage offer. Totals use unrounded repayments, so multiplying the displayed monthly figure may produce a slightly different total.

Reading your repayment schedule

A repayment schedule, also called an amortisation schedule, shows how the mortgage is expected to reduce over time.

Each row displays:

• The scheduled repayment date.
• The regular mortgage payment.
• Any monthly and one-off overpayments.
• The total mortgage payment.
• The amount used to repay capital.
• The interest charged.
• The remaining mortgage balance.

Early payments generally contain a larger interest share because the outstanding balance is higher. As the balance falls, less interest is charged and more of the regular payment reduces the capital, assuming the rate remains unchanged.

The annual chart groups these payments by calendar year. A partial first or final year may therefore contain fewer than 12 payments.

When comparing scenarios, look at the total interest, final repayment date and balance remaining when your current mortgage deal ends.

How repayment dates work

The schedule starts on your selected first repayment date and follows the same calendar day each month where possible.

If a month does not contain that day, the calculator uses its final day. For example, a schedule starting on 31 January uses the last day of February and returns to 31 March for the following payment.

The estimated mortgage completion date is the date of the last scheduled payment. Your lender’s actual collection dates and interest treatment may differ.

Making mortgage overpayments

An overpayment is money paid towards your mortgage in addition to the required repayment.

By reducing the outstanding balance sooner, overpayments can lower future interest and help you clear the mortgage earlier.

The calculator supports two options:

The original schedule contains no overpayments. The revised schedule keeps the normal repayment and adds your selected overpayments, with the final payment adjusted to avoid paying more than the balance owed.

The comparison calculates:

Interest saved = Original total interest − Revised total interest

Payments saved = Original number of payments − Revised number of payments

Repayment time saved is shown as whole years and remaining months. At a genuine 0% interest rate, overpayments can shorten the schedule but cannot create interest savings.

What to check before overpaying

Your lender’s rules may differ from the calculator’s assumptions. Some products restrict penalty-free overpayments or apply early repayment charges.

Before making an additional payment, check:

• Your overpayment allowance and how it is calculated.
• Whether a charge would apply.
• Whether the lender will reduce your term or future monthly payments.
• Whether you will retain enough accessible savings for unexpected costs.

Consider other expensive debts and your wider savings needs too. Money paid into your mortgage may not be readily available to withdraw later.

Budgeting beyond your mortgage

Your mortgage repayment is only one part of homeownership. Purchase expenses and ongoing household costs also affect your budget.

If a lender allows a mortgage fee to be added to the loan, this reduces the upfront payment but can increase interest costs. The calculator’s mortgage amount is derived from property price minus deposit; it does not automatically add product fees.

Also budget for Council Tax in England, Scotland and Wales, or domestic rates in Northern Ireland.

The optional property tax, insurance and HOA/service-charge fields affect only the estimated monthly housing cost. They do not change either mortgage schedule or the lifetime mortgage repayment and interest totals. Use applicable UK expenses and avoid entering the same cost twice.

Property purchase taxes across the UK

The relevant purchase tax depends on the property’s location:

The amount payable depends on the purchase price and your circumstances. First-time buyer treatment and additional-property charges differ between UK nations.

Check the current rules when preparing your budget. These purchase taxes are separate from recurring housing costs and are not automatically calculated by this mortgage tool.

Formula and calculation method

For a positive fixed interest rate, the regular monthly repayment uses:

M = P × r × (1 + r)ⁿ ÷ ((1 + r)ⁿ − 1)

Where:

• M = regular monthly mortgage repayment.
• P = mortgage amount.
• r = annual interest rate divided by 100 and then by 12.
• n = mortgage term in years multiplied by 12.

At 0% interest, the repayment is P ÷ n.

Monthly interest is calculated from the outstanding balance. The remainder of the payment reduces capital. Overpayments reduce that balance further, and the final payment is capped at the amount needed to clear the mortgage.

Total repayments and interest are calculated from the schedule. Calculations retain full precision internally, while displayed and downloaded amounts are reconciled to two decimal places so payment components add up and the final displayed balance is zero.

Getting useful results

Change one input at a time to understand its effect. Useful comparisons include:

• Your planned deposit versus a larger deposit.
• A 25-year mortgage versus a 30-year mortgage.
• Your expected interest rate versus a higher-rate scenario.
• Standard repayments versus monthly overpayments.
• A monthly overpayment versus a one-off payment.

A lower monthly payment does not necessarily mean a cheaper mortgage overall. Review the total interest and repayment period alongside your monthly budget.

Assumptions and limitations

The calculator assumes the entered interest rate remains fixed throughout the term and all scheduled payments are made. It does not model future remortgaging, variable rates, missed payments or lender-specific early repayment charges.

Actual mortgage figures can differ because of daily interest calculations, payment timing, fees, rounding and the way a lender processes overpayments.

Currency selection changes presentation only. Enter all amounts in the same currency.

The estimate does not confirm how much you can borrow or whether a lender will approve an application. Lenders assess income, spending, existing commitments, credit history and the property itself.