How UK mortgages differ
Most UK mortgages are not fixed for their whole life. You take an initial deal, usually a 2 or 5-year fixed rate or a tracker, and when it ends the loan moves to the lender’s standard variable rate (SVR) unless you switch to a new deal. That is why this calculator asks for two rates and shows two payments. Most US-style calculators assume one rate for 25 years, which can understate what you will pay after the deal ends.
You also choose how the capital is repaid:
- Repayment (capital and interest): each payment covers the interest and a slice of the loan, so the balance reaches zero at the end of the term. This is what most homeowners have.
- Interest-only: you pay just the interest each month. The balance never falls, and the whole loan is due at the end. Lenders need a credible plan to repay it.
- Part and part: some of the loan on repayment and the rest on interest-only.
The formulas
For the repayment part:
P = amount borrowed · r = yearly rate ÷ 12 · n = months left in the term
For the interest-only part:
When the deal ends, lenders recalculate the payment on the balance you still owe, spread over the months left, at the new rate. The calculator does the same.
Worked example 1: a 5-year fix, then the SVR
You buy a £300,000 home with a 10% deposit (£30,000) and borrow £270,000 over 25 years. The 5-year fix is 4.5%, the lender’s SVR is 7.25%, and the £999 product fee is added to the loan, so you borrow £270,999 (90% LTV before the fee).
- Years 1 to 5 at 4.5%: £1,506.30 a month
- After 5 years you still owe £238,094.04. You paid £57,473.07 of interest in those five years.
- Years 6 to 25 on the SVR at 7.25%: £1,881.84 a month, £375.54 more
- Total interest if you stay on the SVR: £271,020.17
If you could keep 4.5% for all 25 years, total interest would be £180,891.14, around £90,000 less. That gap is why most people remortgage before their deal ends instead of drifting onto the SVR. The figure “owed when the deal ends” is the amount you would remortgage.
Worked example 2: repayment vs interest-only
£200,000 borrowed at 5% over 25 years:
| Type | Monthly payment | Total interest | Still owed at the end | Total paid |
|---|---|---|---|---|
| Repayment | £1,169.18 | £150,754.02 | £0 | £350,754.02 |
| Interest-only | £833.33 | £250,000.00 | £200,000.00 | £450,000.00 |
| Part and part (50/50) | £1,001.26 | £200,377.01 | £100,000.00 | £400,377.01 |
Interest-only cuts the monthly payment by £335.85, but it costs about £100,000 more over the term, and you still have to find £200,000 at the end. The FCA requires lenders to check that you have a believable way to repay that lump sum.
Worked example 3: overpaying £200 a month
Back to example 1, but you overpay £200 every month.
- You are mortgage-free after 253 months (21 years 1 month) instead of 25 years.
- You save £58,628.03 of interest.
- When the fix ends you owe £224,664.93 instead of £238,094.04, so the SVR payment is £1,775.70 rather than £1,881.84.
- £2,400 a year is under 1% of the loan, well inside a typical 10% overpayment allowance.
Many lenders typically allow up to 10% of the balance each year without an early repayment charge (ERC) during a fixed or tracker deal. Allowances and ERCs vary, so check your mortgage offer before you overpay.
Monthly repayment per £100,000
A quick reference for repayment mortgages, plus the interest-only payment over 25 years:
| Rate | 25 years | 30 years | 35 years | Interest-only |
|---|---|---|---|---|
| 4% | £527.84 (£58,351 interest) | £477.42 (£71,870) | £442.77 (£85,965) | £333.33 |
| 5% | £584.59 (£75,377) | £536.82 (£93,256) | £504.69 (£111,969) | £416.67 |
| 6% | £644.30 (£93,290) | £599.55 (£115,838) | £570.19 (£139,480) | £500.00 |
A longer term lowers the payment, but stretching from 25 to 35 years at 5% adds over £36,000 of interest per £100,000 borrowed.
Loan-to-value bands
Lenders set rates by loan-to-value (LTV): the mortgage divided by the property’s value. Moving into a lower band usually unlocks better rates.
| Deposit | LTV | What to expect |
|---|---|---|
| 40% or more | 60% or less | Usually the best rates on offer |
| 25% | 75% | Very competitive rates |
| 15% | 85% | Wider choice, slightly higher rates |
| 10% | 90% | Common for first-time buyers |
| 5% | 95% | Fewer deals and higher rates |
The calculator shows your LTV and band. If you are just above a band edge, a slightly larger deposit can lower your rate.
Stamp duty
This calculator does not include Stamp Duty Land Tax (SDLT), which you pay on top of your deposit. In England and Northern Ireland, the rates from 1 April 2025 are:
| Part of the price | Standard rate | First-time buyer rate |
|---|---|---|
| Up to £125,000 | 0% | 0% (up to £300,000) |
| £125,001 to £250,000 | 2% | 0% |
| £250,001 to £925,000 | 5% | 5% from £300,001 to £500,000 |
| £925,001 to £1.5 million | 10% | No relief if the price is over £500,000 |
| Above £1.5 million | 12% | No relief |
Buyers of an additional home, such as a buy-to-let or second home, pay a 5% surcharge on top of each band. Scotland charges Land and Buildings Transaction Tax (LBTT) and Wales charges Land Transaction Tax (LTT), each with their own bands. Use HMRC’s SDLT calculator for the exact amount on your purchase.
Tips
- Compare deals on total cost over the deal period, not just the rate. A low rate with a £1,999 fee can cost more than a higher rate with no fee, especially on a small loan.
- Think twice before adding the fee to the loan. In example 1, adding £999 raises the payment by £5.55 and costs £666.83 of extra interest over 25 years at 4.5%.
- Start remortgaging early. Many lenders let you lock a new rate up to six months before your deal ends.
- Test a higher follow-on rate. Put a cautious figure in “Rate after the deal ends” to see how your budget copes.
- Check affordability from your take-home pay. The UK salary calculator shows your monthly income after tax and National Insurance.
Common mistakes
- Assuming the fixed payment lasts for the whole term. It lasts only as long as the deal.
- Ignoring the capital on interest-only. The low payment hides a large bill at the end.
- Overpaying beyond the allowance. An early repayment charge of a few percent can wipe out the interest you save.
- Confusing deposit and LTV. A 10% deposit is a 90% LTV, and fees added to the loan push the real borrowing slightly higher.
To see a plain schedule for any loan, use the amortization calculator. To work out how fast extra payments clear an existing mortgage, try the mortgage payoff calculator. If you are buying in the US instead, the mortgage calculator adds property tax, insurance and PMI.
Results are estimates. Lenders may calculate interest daily or annually and round payments, so your mortgage offer and annual statements are the final word. For free, impartial help, MoneyHelper is backed by the UK government.