🏠 Mortgage Calculator

Use this free UK mortgage calculator to estimate your monthly repayment on a residential property. Enter the property price, deposit, interest rate, and mortgage term to see a clear breakdown of your monthly cost. The tool works for both repayment (capital and interest) and interest-only mortgages, so you can compare the two side by side.

Whether you’re a first-time buyer saving for a deposit, a home mover looking to step up the ladder, or a homeowner considering a remortgage, this calculator helps you understand what you can afford before you speak to a lender. Adjust the inputs to model different scenarios—a larger deposit, a shorter term, or a change in interest rate—and see instantly how each factor affects your monthly outgoing.

How UK Mortgages Work

A mortgage is a loan secured against a property. In the UK, most residential mortgages run for 25 to 35 years, although shorter and longer terms are available. You make monthly payments to the lender, and the property acts as collateral—if you fail to keep up repayments, the lender can repossess and sell the home to recover the debt.

With a repayment mortgage (also called a capital-and-interest mortgage), each monthly payment covers a portion of the loan balance plus the interest charged that month. Over time the outstanding balance decreases until the loan is fully repaid at the end of the term. With an interest-only mortgage, you pay only the interest each month and must repay the full loan amount as a lump sum at the end of the term, typically through savings, investments, or the sale of the property.

Types of Interest Rate

  • Fixed rate: The interest rate stays the same for an agreed period—commonly 2, 3, 5, or 10 years. This gives certainty over your monthly payments. When the fixed period ends, the mortgage usually reverts to the lender’s Standard Variable Rate (SVR), which is almost always higher.
  • Tracker rate: The rate tracks the Bank of England base rate plus a set margin (for example, base rate + 0.75%). When the base rate changes, your payment changes too. Tracker deals can be attractive when rates are low or expected to fall.
  • Standard Variable Rate (SVR): The lender’s default rate, which it can change at any time. SVRs are typically 1–2 percentage points above the best fixed and tracker deals, so most borrowers remortgage to a new deal before their current product expires.

How to Calculate Your Mortgage Payment

The standard formula for a repayment mortgage is:

M = L × [r(1 + r)n] ÷ [(1 + r)n – 1]

where M is the monthly payment, L is the loan amount, r is the monthly interest rate (annual rate ÷ 12), and n is the total number of monthly payments (term in years × 12).

For example, borrowing £200,000 over 25 years at 4.5% annual interest gives r = 0.00375 and n = 300. Plugging these in: M = £200,000 × [0.00375 × 1.00375300] ÷ [1.00375300 – 1] = approximately £1,111 per month. Over the full term you would pay roughly £333,400 in total, of which £133,400 is interest.

For an interest-only mortgage the calculation is simpler: monthly payment = loan × annual rate ÷ 12. On the same £200,000 at 4.5%, that is £200,000 × 0.045 ÷ 12 = £750 per month—but you still owe £200,000 at the end.

Stamp Duty Land Tax (SDLT)

Stamp Duty is a tax you pay when you buy a property in England or Northern Ireland above a certain price. The current thresholds are:

Standard buyers:

  • 0% on the first £250,000
  • 5% on the portion from £250,001 to £925,000
  • 10% on the portion from £925,001 to £1,500,000
  • 12% on any amount above £1,500,000

First-time buyers:

  • 0% on the first £425,000
  • 5% on the portion from £425,001 to £625,000

If the total price exceeds £625,000, first-time buyer relief is lost and the standard rates apply. Buyers purchasing an additional property (such as a buy-to-let or second home) pay a 3% surcharge on top of the standard rates at every band.

LTV, Deposits, and Affordability

Loan to Value (LTV) is the mortgage amount expressed as a percentage of the property value. A £180,000 mortgage on a £200,000 home is 90% LTV. Lenders use LTV bands to set interest rates: the lower the LTV, the better the rate. Key thresholds are 95%, 90%, 85%, 80%, 75%, and 60% LTV.

Most UK lenders require a minimum 5% deposit (95% LTV). With a 10% deposit (90% LTV) you unlock noticeably lower rates, and at 25% or more (75% LTV) you typically access the most competitive deals on the market.

Lenders generally cap borrowing at 4 to 4.5 times your gross annual income, although some specialist lenders stretch to 5 or even 5.5 times for higher earners or certain professions. They also stress-test your ability to pay at a higher rate—usually 1–3% above the product rate—to ensure you can cope if rates rise.

First-time buyers under 40 may benefit from a Lifetime ISA, which provides a 25% government bonus on savings of up to £4,000 per year. The bonus can be put towards a first home worth up to £450,000. The older Help to Buy ISA is now closed to new applicants but existing account holders can continue saving until November 2029.

Tips for UK Mortgage Borrowers

  • Save the largest deposit you can. Crossing an LTV band—even by a small amount—can meaningfully reduce your interest rate. For example, moving from 90% to 85% LTV could save you several hundred pounds a year in interest.
  • Budget for upfront costs. Beyond the deposit and Stamp Duty, expect to pay an arrangement fee (£1,000–£2,000), a valuation fee (£250–£600), conveyancing solicitor fees (£1,000–£1,500 plus disbursements), and a survey (£400–£1,500 depending on the type).
  • Remortgage before your deal ends. When your fixed or tracker period expires, you will move onto the lender’s SVR, which is nearly always more expensive. Start comparing new deals three to six months before expiry.
  • Consider overpayments. Most fixed-rate mortgages allow you to overpay by up to 10% of the outstanding balance each year without penalty. Even modest overpayments can cut years off your term and save thousands in interest. Use the Percentage Calculator to work out 10% of your balance.
  • Think about protection. Life insurance, critical-illness cover, and income protection can safeguard your family’s home if your circumstances change. Lenders do not require these, but they are worth considering alongside your mortgage.

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Frequently Asked Questions

How much can I borrow for a UK mortgage?
Most lenders offer 4 to 4.5 times your gross annual income. A household earning £60,000 per year could typically borrow between £240,000 and £270,000. Some specialist lenders may stretch to 5 or 5.5 times income for higher earners or specific professions, subject to affordability checks.
How much Stamp Duty do first-time buyers pay?
First-time buyers pay no Stamp Duty on the first £425,000 of the purchase price and 5% on the portion between £425,001 and £625,000. If the property costs more than £625,000, the relief is lost and standard rates apply from the first pound.
Should I choose a fixed or tracker mortgage?
A fixed rate gives payment certainty for 2 to 10 years, making budgeting easier. A tracker rate follows the Bank of England base rate, so your payments fall when rates drop but rise when they increase. Fixed deals are popular when rates are volatile; trackers can be cheaper when rates are stable or falling.
What is LTV and why does it matter?
LTV (Loan to Value) is the mortgage amount as a percentage of the property value. Lower LTV means you have more equity and less risk for the lender, which translates into lower interest rates. Key bands are 95%, 90%, 85%, 80%, 75%, and 60% LTV—crossing into a lower band often unlocks noticeably better deals.
What hidden costs should I budget for?
Beyond the deposit and Stamp Duty, expect an arrangement fee (£1,000–£2,000), valuation fee (£250–£600), conveyancing solicitor fees (£1,000–£1,500 plus disbursements), and a homebuyer’s survey (£400–£1,500). Buildings insurance is also required from the day of exchange.
When should I remortgage?
Start looking for a new deal three to six months before your current fixed or tracker period ends. When the product expires you will revert to the lender’s Standard Variable Rate, which is typically 1–2 percentage points higher. Remortgaging promptly can save you hundreds of pounds per month.