Mortgage payment, explained
How this mortgage calculator works
For a repayment mortgage, the calculator uses the standard amortisation formula. Each payment includes interest and some capital, so the balance reaches zero at the end if every payment is made and the rate does not change. For an interest-only mortgage, it shows the monthly interest and adds the original capital to the total amount that must ultimately be repaid.
The loan-to-value is the mortgage amount divided by the property price. For example, a £35,000 deposit on a £350,000 home leaves a £315,000 mortgage and a 90% LTV.
Assumptions and important limits
- The interest rate is assumed to stay the same for the entire mortgage term.
- Repayments are monthly and the annual rate is divided into twelve monthly periods.
- No product, broker, legal, valuation, insurance or early-repayment fees are included.
- The calculator does not model introductory periods followed by a different rate.
- The result is not an affordability assessment, mortgage offer or recommendation.
- Common LTV bands are illustrative market reference points and do not guarantee eligibility or pricing.
See the full mortgage-calculator methodology.
First-time buyer starting points
Your deposit is only one part of the cash needed to buy. Budget separately for any applicable Stamp Duty, conveyancing, searches, survey or valuation, moving costs, insurance and mortgage fees. An Agreement in Principle can give an early borrowing indication, but it is not a guaranteed mortgage offer.
Use the LTV result to understand the size of the mortgage relative to the property. A larger deposit reduces the loan and may move you into another lender pricing band, but available products still depend on lender criteria and your circumstances.
Moving-home starting points
Your potential deposit is usually the sale price of your current home minus the outstanding mortgage and selling costs. If your existing mortgage is portable, that normally means the product may be moved subject to a new application and lender approval—it does not guarantee the same borrowing amount or avoid affordability checks.
Check early-repayment charges and the timing of the sale and purchase before comparing a new mortgage solely by monthly payment.
Already have a mortgage?
The general calculator shows what a balance could cost at one rate. The dedicated remortgage savings calculator compares your current rate with a potential replacement and links to guidance on fees, product transfers, lender SVRs and timing.
Mortgage calculator questions
How are mortgage repayments calculated?
A repayment mortgage uses the loan amount, monthly interest rate and number of monthly payments in the standard amortisation formula. Early payments contain more interest; later payments contain more capital.
What is loan-to-value?
Loan-to-value, or LTV, is the mortgage divided by the property value. A £315,000 mortgage on a £350,000 property is 90% LTV.
Does this show how much I can borrow?
No. It estimates the cost of the loan entered. Lenders assess income, regular commitments, spending, credit history, age, term, property and their own affordability rules.
Why is a longer mortgage term cheaper each month?
The capital is spread across more payments, reducing the monthly amount. Interest is charged for longer, so total interest will usually be higher.
What is missing from an interest-only payment?
The monthly figure covers interest but does not reduce the original mortgage balance. The capital still needs to be repaid at the end through an accepted repayment strategy.