How this calculator works
UK mortgages are almost always amortising loans: you repay a fixed monthly amount that combines interest (charged on your outstanding balance) and, for a repayment mortgage, a slice of capital. The formula lenders use — and the one behind this calculator — is the standard amortising-loan payment formula:
M = P × r × (1+r)n ÷ ((1+r)n − 1)
where P is your mortgage amount, r is your monthly interest rate (your annual rate divided by 12), and n is the total number of monthly payments (your term in years × 12). For an interest-only mortgage, the payment is simpler: it's just P × r every month, with the full balance still owed at the end of the term.
Worked example
Say you borrow £250,000 over 25 years at a 4.75% fixed rate. Plug those into the calculator above and you'll see a monthly repayment of roughly £1,430, with total interest of around £178,900 over the full term — meaning the total cost of the mortgage is close to £428,900. Notice how, in the amortisation chart, the balance falls slowly at first and then accelerates in the later years: that's because a fixed payment covers a shrinking amount of interest and a growing amount of principal as the balance reduces.
What affects your monthly payment
- Interest rate — the single biggest lever. Even a 0.5 percentage point difference on a £250,000 mortgage moves the monthly payment by roughly £70–£80.
- Term length — a longer term lowers the monthly payment but increases total interest paid, since you're borrowing the money for longer.
- Repayment type — interest-only payments are lower month-to-month, but you must have a credible repayment vehicle for the full balance at the end of the term.
- Overpayments — regular or lump-sum overpayments (where your lender allows them, typically up to 10% of the balance per year penalty-free) reduce the balance faster and cut total interest.
A note on accuracy
This calculator computes on full, unrounded figures throughout and only rounds to the nearest penny for display, so the amortisation schedule doesn't drift. It reflects your mortgage's principal and interest only — it does not include buildings insurance, service charges, or (unlike US mortgage payments) property tax, since UK council tax is not collected via your mortgage payment. For official guidance on mortgages and affordability, see theFinancial Conduct Authorityand MoneyHelper.