Mortgage repayment calculator
Enter your loan amount, interest rate and mortgage term to see an estimated monthly repayment and the total cost of the loan. Below the calculator we show exactly how the figure is worked out, and where it differs from what a lender will actually quote you.
Estimated monthly repayment
£1,425
Total repaid
£427,588
Over the full term
Interest paid
£177,588
Assuming this rate for the whole term
Interest in month one
£990
The rest of your first payment reduces the balance
How the repayment calculation works
A repayment (capital and interest) mortgage is what mathematicians call an annuity. You pay the same amount every month, and by the end of the term the balance is exactly zero. Getting that to work out neatly requires one formula:
M = P × r ÷ (1 − (1 + r)−n)
In plain English:
- P is the amount you borrow.
- r is the monthly interest rate — the annual rate divided by 12. A 4.75% rate becomes 0.0039583 per month.
- n is the total number of monthly payments — the term in years multiplied by 12. A 25-year term is 300 payments.
- M is the level monthly payment that clears the debt in exactly n months.
The important idea behind the formula is that interest is charged on what you still owe, not on what you originally borrowed. Every month the lender adds one month's interest to the balance, then takes your payment off it. Because your payment is bigger than the interest, the balance falls a little, so next month's interest is slightly smaller and slightly more of your payment goes to clearing the debt. That effect compounds, which is why a repayment mortgage barely seems to move for the first few years and then falls off a cliff towards the end.
A worked example, step by step
Worked example
£250,000 borrowed at 4.75% over 25 years
- Convert the rate to a monthly figure: 4.75 ÷ 100 ÷ 12 = 0.00395833.
- Convert the term to months: 25 × 12 = 300 payments.
- Work out the numerator: £250,000 × 0.00395833 = £989.58. That is also the interest charged in your very first month.
- Work out the denominator: 1 − (1.00395833)−300 = 1 − 0.3057 = 0.6943.
- Divide: £989.58 ÷ 0.6943 = £1,425.29 a month.
Monthly payment: £1,425.29
Over 300 months that totals about £427,588, of which £177,588 is interest. In month one, £989.58 of the £1,425.29 is interest and only £435.71 reduces the balance. By the final year, almost the entire payment is capital.
What changing one input does
| Scenario | Monthly payment | Total interest |
|---|---|---|
| 4.75% over 20 years | £1,615.56 | £137,734 |
| 4.75% over 25 years | £1,425.29 | £177,588 |
| 4.75% over 30 years | £1,304.12 | £219,483 |
| 5.75% over 25 years | £1,572.77 | £221,831 |
Two things stand out. Stretching the term from 25 to 30 years saves about £121 a month but costs roughly £42,000 more in interest. And a single percentage point on the rate costs about £147 a month on this loan — which is why shopping the rate matters far more than most people assume.
What the result does and does not tell you
The monthly figure is reliable arithmetic. The total-cost figure is an illustration, and it is the number people most often misread. Here is what to keep in mind:
- It assumes one rate for the whole term. Virtually nobody keeps the same rate for 25 years. You will remortgage several times, and each time the payment is recalculated on the balance then outstanding over the remaining term.
- It is capital and interest only. It excludes arrangement and valuation fees, buildings insurance, life or income protection, service charges, ground rent and any broker fee.
- It is not a statement of what you can borrow. Being able to afford a payment on paper is different from a lender agreeing to lend you that amount. Use the affordability calculator for that side of the question.
- Rounding differences are normal. Lenders round payments to the penny and calculate interest daily or monthly depending on the product, so a real quote may sit a pound or two either side of this figure.
What lenders do differently from this model
A lender's illustration is built on the same annuity formula, but with several practical refinements that this simplified model leaves out.
- Two rates, not one. A lender's Key Facts Illustration shows the payment during the initial fixed or tracker period, then a second, usually higher payment for the remainder of the term at the reversion rate. The total cost quoted is the sum of both phases.
- Daily interest. Many UK lenders charge interest daily rather than monthly. The difference is small but real, and it is what makes overpayments so effective — money paid in reduces the balance interest is charged on from that day.
- Fees added to the loan. If you add a product fee to the mortgage instead of paying it upfront, you pay interest on it for the whole term. To model that here, add the fee to the loan amount.
- Part-and-part structures. Some mortgages are part repayment and part interest-only, which produces a lower monthly payment and a balance still owed at the end.
When it is worth speaking to a broker
This calculator answers "what would this loan cost?". A broker answers "which loan should this be?" — which is a different question, and the one that usually saves more money. It is worth getting advice if any of these apply: your income is self-employed, contracted, bonus-heavy or from more than one source; you have adverse credit; you are buying a flat, a new build or a non-standard construction; you are close to the end of a fixed rate and unsure whether to fix again; or you simply want someone to check the product fee is worth paying at your loan size.
On a small loan, a low headline rate with a £1,499 fee is often worse than a slightly higher rate with no fee. Working out which is cheaper over the deal period, rather than over the full term, is exactly the sort of comparison a broker does routinely.
Frequently asked questions
- How is a monthly mortgage payment calculated?
- A repayment mortgage uses the annuity formula: monthly payment = P × r ÷ (1 − (1 + r)^−n), where P is the loan, r is the annual interest rate divided by 12, and n is the number of monthly payments. The payment stays level, but each month a little more of it goes to capital and a little less to interest.
- Why does most of my early payment go on interest?
- Interest is charged on the balance you still owe, and that balance is at its largest on day one. On a £250,000 mortgage at 4.75%, the first month's interest alone is about £990 of a £1,425 payment. As the balance falls, the interest portion shrinks and the capital portion grows, so repayment speeds up sharply in the later years.
- Does a longer mortgage term cost more overall?
- Yes. A longer term lowers the monthly payment but you pay interest for longer, so total interest rises. On £250,000 at 4.75%, a 25-year term costs roughly £1,425 a month and about £178,000 in interest; stretching to 30 years cuts the payment to around £1,304 but adds tens of thousands to the interest bill.
- Will my mortgage payment stay the same for the whole term?
- Almost certainly not. Most UK mortgages fix the rate for two to five years, then revert to the lender's standard variable rate unless you remortgage. The calculator assumes one rate for the whole term, so treat its total-cost figure as an illustration of that single rate rather than a forecast of what you will actually pay.
- Does the calculator include fees, insurance or ground rent?
- No. It shows capital and interest only. Arrangement fees, valuation fees, buildings insurance, life cover, service charges and ground rent all sit on top. If you add a product fee to the loan rather than paying it upfront, add it to the loan amount so the monthly figure reflects the interest you will pay on it.
- What is the difference between the interest rate and the APRC?
- The interest rate is what the lender charges on the balance. The APRC (annual percentage rate of charge) blends the initial rate, the follow-on rate for the rest of the term and most mandatory fees into one comparison figure. APRC is useful for comparing products, but it does not tell you what you will pay each month during the initial deal.
Keep going
These are the tools and guides people most often need next.
- Fixed vs variable rate mortgages — why the rate you type in here may not last the term.
- The UK remortgage guide — what happens when the initial deal ends.
Guide only. This calculator gives an illustrative estimate and is not regulated mortgage advice or a personal recommendation. Actual figures depend on the lender, product, term, credit profile and your circumstances. Only an FCA-authorised adviser can recommend a product for you. Your home may be repossessed if you do not keep up repayments on your mortgage.
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