Mortgage Repayment Calculator

A repayment mortgage calculator uses the standard amortisation formula to work out your fixed monthly payment. Written out, it is M = P × r(1+r)^n / ((1+r)^n − 1), where P is the loan, r the monthly interest rate and n the number of months. The result covers both interest and capital repayment, so the debt reaches zero exactly at the end of the term. On a £200,000 mortgage at 5% over 25 years that works out at about £1,169 a month.

With a repayment mortgage, early payments are mostly interest, and the capital portion grows as the balance falls. An interest-only mortgage charges only the interest each month, leaving the full capital balance due at the end. The same £200,000 at 5% costs £833 a month on interest-only against £1,169 on repayment, but the entire £200,000 still has to be found on the final day. Over 25 years the repayment version costs £350,800 in total, being the £200,000 principal plus £150,800 of interest. This calculator supports both types and shows the total amount repaid over the life of the loan.

Residential interest-only lending is tightly controlled. Most lenders want to see a credible repayment plan, typically an investment ISA or a pension lump sum, before granting it. Buy-to-let mortgages are the opposite, since they are usually interest-only by design: rental income covers the monthly interest and capital growth is expected to cover the balance when the property is eventually sold. Anyone weighing the two should look at the total cost line rather than the monthly figure, because interest-only always looks cheaper right up until the capital falls due.

The calculation assumes a fixed interest rate throughout the term, which is not how UK mortgages actually behave. Most are fixed for 2-5 years and then revert to the lender's standard variable rate (SVR). A 1% rate rise on £200,000 over 25 years adds roughly £110 a month, moving the payment from £1,169 to £1,283, and a 2% rise adds £230. On a variable or tracker deal that lands immediately, whereas fixed-rate borrowers feel it all at once when the fix ends. After 14 base rate rises between 2021 and 2023 and 5 cuts across 2024 and 2025, the average 5-year fix had climbed back to 5.78% by mid-September 2026 (Moneyfacts) as swap rates rose, even with Bank Rate at 3.75%, so testing your budget at 2 points above your rate is a sensible check.

Overpayments are the strongest lever most borrowers have. Adding £100 a month to that same £200,000 mortgage at 5% over 25 years cuts 3 years 6 months off the term and saves £24,505 in interest, while £200 a month cuts 6 years 2 months and £41,843. Most UK fixed-rate deals allow overpayments of up to 10% of the balance each year without penalty, and once the fix has ended you can usually overpay without limit, subject to your lender. Timing counts as much as the amount, because money paid early in the term has two to three times the effect of the same money paid late.

Choosing between deal types is a judgement about rates rather than arithmetic. Fixing suits borrowers who value certainty when rates look stable or falling, with 2-year deals for flexibility, 5-year deals for stability and 10-year deals for the very long view. Trackers suit those who expect rates to fall, though it pays to check for a collar, the minimum rate below which the tracker stops following the market down. Discount mortgages, priced at a set margin below the lender's SVR, tend to suit short-term borrowers.

Start looking at your next deal 3-6 months before the current one ends. A product transfer with your existing lender is the quickest route and involves the least paperwork, while shopping the whole market usually saves another 0.1-0.5% on the rate, which on a large balance repays the effort several times over. Leave it too late and you drop onto the standard variable rate, which is exactly where the gap between a fixed payment and a market rate bites hardest.