Mortgage Calculator
Calculate your monthly mortgage repayments, total interest and full loan cost instantly. Enter your property price, deposit and interest rate for a complete breakdown — plus a free AI mortgage analysis with personalised affordability advice.
How to Use the Mortgage Calculator
Enter your property price, deposit amount, annual interest rate and loan term. Optionally add an extra monthly payment to see how much interest you could save. Click Calculate for your full mortgage breakdown including a yearly repayment schedule and an AI mortgage analysis.
How Mortgage Payments Are Calculated
Your monthly mortgage payment is calculated using the amortisation formula. Each payment covers both interest on the remaining balance and a portion of the principal. In the early years most of your payment goes toward interest — over time more goes toward reducing the loan.
Example: £225,000 loan at 4.5% over 25 years = £1,249/month
How Much Deposit Do You Need?
Most lenders require a minimum deposit of between 5% and 20% of the property price. A larger deposit means a smaller loan, lower monthly payments and less total interest paid over the life of the mortgage.
| Deposit Size | Loan-to-Value (LTV) | Typical Impact |
|---|---|---|
| 5% | 95% LTV | Higher rates, limited lender choice |
| 10% | 90% LTV | More lenders available, better rates |
| 20% | 80% LTV | Good rates, wider product choice |
| 25%+ | 75% LTV or below | Best rates typically available |
| 40%+ | 60% LTV or below | Most competitive rates on the market |
How Much Can You Borrow?
Most mortgage lenders will lend between 4 and 5 times your annual household income, though this varies significantly by country, lender and your personal financial situation. Your deposit size, credit history, existing debts and monthly outgoings all affect what lenders will offer you.
- A household income of £50,000 could typically borrow £200,000–£250,000
- A household income of £80,000 could typically borrow £320,000–£400,000
- Credit score, existing debts and monthly commitments all reduce borrowing capacity
- It's always worth speaking to a mortgage broker who can compare deals across multiple lenders
Fixed Rate vs Variable Rate Mortgages
A fixed rate mortgage locks your interest rate for a set period — typically 2, 3 or 5 years — giving you certainty over your monthly payments regardless of what happens to interest rates. A variable rate mortgage moves in line with your central bank's base rate or the lender's own rate.
| Type | Pros | Cons |
|---|---|---|
| Fixed Rate | Payment certainty, protection from rate rises | Higher initial rate, exit fees if you switch early |
| Variable Rate | Can be cheaper when rates fall | Payments can rise unpredictably |
| Tracker | Follows base rate directly, transparent | No protection if base rates rise sharply |
| Offset | Savings reduce interest charged | Usually higher rate, more complex to manage |
How to Reduce Your Mortgage Costs
Overpaying your mortgage even by a small amount each month can save significantly in interest and cut years off your term. Use the extra payment field in the calculator above to see exactly how much you would save.
- Many lenders allow overpayments of up to 10% of the outstanding balance per year without penalty
- Remortgaging when your fixed rate deal ends rather than rolling onto the lender's standard variable rate can save hundreds per month
- Making lump sum payments when you receive windfalls (bonuses, inheritance) significantly reduces total interest
- A mortgage broker can find the most competitive deal when your current term expires — often at no cost to you
Should You Make Extra Repayments?
Yes — extra repayments are one of the most effective financial decisions a homeowner can make. Even a small additional payment each month can save tens of thousands over the life of a mortgage and significantly reduce your loan term. Use the extra payment field in the calculator above to see exactly how much you would save.
Always check with your lender whether early repayment charges apply before making large lump sum payments. Most lenders allow up to 10% overpayment per year without penalty on fixed rate deals.
FAQs
How much can I borrow for a mortgage?
Most lenders will lend between 4 and 5 times your annual income, though this varies by country and lender. Your deposit size, credit score and existing debts also affect how much you can borrow. Speaking to a mortgage broker or financial advisor will give you a clearer picture of your borrowing capacity.
What is the difference between principal and interest?
Principal is the amount you borrowed. Interest is what the lender charges for the loan. Early mortgage payments are mostly interest — as the balance reduces over time, more of each payment goes toward the principal.
What happens if interest rates rise?
If you are on a variable rate mortgage your monthly payments will increase when rates rise. Use this calculator to test different interest rate scenarios and see how your payments would change. A fixed rate mortgage protects you from rate increases for the duration of the fixed term.
Is a 15 year or 30 year mortgage better?
A 15 year mortgage has higher monthly payments but significantly less total interest. A 30 year mortgage is more affordable monthly but costs considerably more overall. Use the loan term dropdown in the calculator to compare both scenarios side by side.
What is an offset mortgage?
An offset mortgage links your savings account to your mortgage balance. Your savings balance reduces the amount you pay interest on, which can save money without requiring you to make overpayments. This calculator does not currently account for offset arrangements.
Can I get an AI analysis of my mortgage results?
Yes — scroll down to the AI Mortgage Analysis below the calculator. Enter your results along with your income and any relevant details to get a personalised affordability assessment with practical advice instantly.
Is this calculator free?
Yes completely free with no sign-up needed.