Enter your property price, deposit, rate and term to see your monthly payment, total interest and total cost. Four rate scenarios (2-year fix, 5-year fix, stress test, custom), a side-by-side term comparison and a rate-sensitivity table give you the full picture in one go.

How UK mortgage repayments are calculated

A repayment mortgage uses the standard amortisation formula:

M = P × r × (1+r)ⁿ / ((1+r)ⁿ − 1)

Where P is the loan amount, r is the monthly interest rate (annual rate divided by 12), and n is the total number of monthly payments (term in years multiplied by 12). Each monthly payment is the same amount, but the split between capital and interest shifts over time — early payments are mostly interest, later payments are mostly capital. By the end of the term the loan is fully repaid.

For an interest-only mortgage, the monthly payment is simply the loan multiplied by the annual rate, divided by 12. The capital balance never reduces — it's still owed in full at the end of the term, when you'll need to repay it from savings, the sale of the property, or another agreed source.

Repayment vs interest-only

• Repayment. The default for residential mortgages. Higher monthly payment than interest-only, but the loan is fully cleared at term end and the total interest paid is lower because the balance falls month by month.
• Interest-only. Lower monthly payment but capital is still owed at the end. Most lenders restrict this to buy-to-let, high-net-worth residential cases, or older borrowers downsizing. Residential applicants typically need to evidence a credible repayment vehicle (savings plan, investment portfolio, sale of another property).

How interest rates affect monthly payments

Rate is the single biggest lever on monthly cost after loan size. On £250,000 over 25 years:

• 4.0% → £1,319/month, total cost £395,600
• 4.5% → £1,390/month, total cost £416,900
• 5.0% → £1,461/month, total cost £438,500
• 5.5% → £1,535/month, total cost £460,500
• 6.0% → £1,611/month, total cost £483,300

Every 0.5 percentage points of rate adds roughly £70–£80 a month to a £250k mortgage on a 25-year term — and that compounds across the life of the loan.

How mortgage term affects total interest

Term length is the trade-off lever. A longer term reduces the monthly payment but increases the total interest paid. On £250,000 at 4.5%:

• 20 years → £1,582/month, total cost £379,700
• 25 years → £1,390/month, total cost £416,900
• 30 years → £1,267/month, total cost £456,100
• 35 years → £1,183/month, total cost £496,900

Extending from 25 to 35 years saves about £205/month but costs roughly £80,000 in extra interest over the life of the loan. For most buyers the right balance is the shortest term whose monthly payment still leaves comfortable headroom for rate rises and lifestyle costs.

What lenders consider besides the monthly payment

• Loan-to-income (LTI). Most UK lenders cap borrowing at 4 to 4.5× household income. Use the affordability calculator to estimate your borrowing range.
• Debt-to-income (DTI). The monthly mortgage payment plus existing commitments shouldn't exceed roughly 40–45% of net pay for most lenders.
• Credit file. Missed payments, defaults, CCJs and high credit utilisation in the last 6 years all narrow your product choice.
• Term end age. Most lenders need the mortgage to end before age 70–75. Borrowers in their 40s and 50s have less term flexibility.
• Property type. Ex-local-authority high-rise, flats above commercial premises, short leaseholds (under 80 years) and non-standard construction all reduce lender choice.

Frequently asked questions

How is a UK mortgage repayment calculated?

A repayment mortgage uses the standard amortisation formula: M = P × r × (1+r)ⁿ / ((1+r)ⁿ − 1), where P is the loan, r is the monthly interest rate (annual rate divided by 12), and n is the total number of monthly payments (years × 12). Each payment covers interest on the remaining balance plus a portion of capital so the loan is fully repaid at the end of the term.

What's the difference between repayment and interest-only?

On a repayment mortgage each monthly payment includes capital and interest, so the loan is fully cleared by the end of the term. On interest-only you pay just the interest each month, and the full capital balance is still owed at the end. Interest-only is now mostly used for buy-to-let or wealth-management cases; residential buyers usually need a credible repayment vehicle to qualify.

How much does interest rate affect my monthly payment?

Materially. On £250,000 over 25 years, the monthly payment rises from £1,390 at 4.5% to £1,535 at 5.5% — an extra £146 a month, or roughly £43,700 over the life of the loan. Every 0.25% of rate change on a £250k loan adds around £37 to the monthly payment.

Does a longer mortgage term reduce the total cost?

No — a longer term reduces the monthly payment but increases the total interest paid. Extending a £250,000 mortgage at 4.5% from 25 to 35 years drops the monthly payment by around £200, but adds roughly £80,000 to the total cost over the life of the loan. Shorter terms are cheaper overall; longer terms are more affordable month to month.

What is a stress test rate?

Lenders run an internal stress test to check you could still afford the mortgage if rates rose. Historically this was the pay rate plus 3 percentage points; the formal FCA stress test was withdrawn in August 2022, but most lenders still apply their own version — typically the standard variable rate plus 1%, or a flat 7–8% benchmark. This calculator's stress scenario uses 8% so you can see the headroom. The dedicated mortgage stress test calculator shows full payment ranges at +1%, +2% and +3%.

Is the rate fixed for the whole term?

Usually not. Most UK mortgages have an initial fixed-rate period of 2 or 5 years, after which you either remortgage onto a new fix or revert to the lender's standard variable rate (SVR), which is typically materially higher. The monthly payment in this calculator assumes a constant rate across the full term, which is a useful planning baseline — your actual payment will change at each remortgage.

What lenders look at besides the loan amount

Loan-to-income multiple (typically 4–4.5× household income), debt-to-income ratio, credit file, deposit source, employment status and stability, property type, and term length relative to your age at term end. The monthly payment matters most for affordability testing, but it isn't the only factor in whether a lender will offer you the loan.

How accurate is this calculator?

The monthly payment figure is mathematically exact for a fixed rate held across the full term, using the standard amortisation formula. The total cost over the life of the loan will be slightly different in practice because you'll remortgage every 2 or 5 years and the rate will change. Treat the result as the headline number for any single rate period.

Once you know your monthly payment

To understand take-home pay and how much of your salary services this mortgage, PayslipCheck breaks down a UK payslip line by line. For longer-form mortgage strategy, PennyWise Finance has a guide to picking between 2 and 5-year fixes.

Calculation rules last reviewed: 24 May 2026.