Enter your details and click Calculate Repayments to see your monthly payment, total interest, amortisation schedule and stress test result.
| Year | Payment | Interest | Capital | Balance |
|---|
For guidance only. Always verify mortgage costs with a qualified mortgage adviser. Rates, fees and eligibility will vary.
Important Information
14-Day Stamp Duty Payment Deadline
When you complete on a property purchase, Stamp Duty Land Tax (SDLT) must be filed and paid to HMRC within 14 days of completion. Your solicitor will handle this, but you must ensure funds are available.
- Up to 3 months late: £100 automatic penalty
- 3–12 months late: £200 penalty
- Over 12 months late: tax-geared penalty up to 100% of the tax due
Use our Stamp Duty Calculator to work out exactly how much you’ll owe on completion day.
Mortgage Reliefs & Government Schemes
Depending on your circumstances, you may be eligible for government-backed schemes or tax reliefs that reduce your mortgage costs.
First Homes Scheme
First-time buyers can get 30–50% off the market price on selected new-build homes in England. Discount is locked to the property for future sales.
Learn more on GOV.UK →Right to Buy
Council tenants in England can buy their home at a discount of up to £96,000 (£127,900 in London), depending on how long they’ve been a tenant.
Check eligibility on GOV.UK →Lifetime ISA (LISA)
Save up to £4,000/year and get a 25% government bonus (up to £1,000/year) towards your first home deposit. Must be aged 18–39 to open.
Learn more on GOV.UK →Mortgage Interest Tax Relief (BTL)
Landlords can claim a 20% tax credit on mortgage interest payments against rental income. The old full deduction was replaced in April 2020.
Learn more on GOV.UK →Shared Ownership
Buy a share (25–75%) and pay rent on the rest. Available through housing associations. You can staircase up to full ownership over time.
Learn more on GOV.UK →Stamp Duty FTB Relief
First-time buyers pay 0% SDLT on the first £300,000 and 5% on £300,001–£500,000. Above £500,000, standard rates apply.
Calculate your FTB stamp duty →Worked Examples
See how different mortgage types, deposits and rates affect your monthly payment and total cost.
First Time Buyer — Repayment
Buy-to-Let — Interest Only
Home Mover — Repayment
Right-to-Buy — Repayment
Not sure which mortgage is right for you?
A whole-of-market mortgage broker compares deals from every UK lender — not just the ones on the high street. They handle the paperwork, negotiate rates, and guide you through the application process. Many charge no upfront fee (they are paid by the lender on completion).
- Access to 90+ lenders
- Exclusive broker-only rates
- Free initial consultation
- Handles all the paperwork
- FCA regulated advice
- No obligation to proceed
This is general guidance, not a recommendation. Always compare your options. Your home may be repossessed if you do not keep up repayments on your mortgage.
How Mortgage Repayments Are Calculated (2026)
A mortgage repayment has two components: capital (paying back the amount borrowed) and interest (the lender's charge for lending you the money). On a repayment mortgage, both are included in every monthly payment. On an interest-only mortgage, you pay only the interest each month and repay the capital at the end of the term.
The formula for monthly repayment is: M = P[r(1+r)^n] / [(1+r)^n – 1], where P is the principal (loan amount), r is the monthly interest rate, and n is the total number of payments. Our calculator handles this automatically for both repayment and interest-only mortgages.
Repayment vs Interest-Only Comparison (2026)
| Metric | Repayment (£250k, 4.5%, 25yr) | Interest-Only (£250k, 5.5%, 25yr) |
|---|---|---|
| Monthly payment | £1,390 | £1,146 |
| Total interest paid | £167,000 | £343,750 |
| Capital repaid at end | £0 (fully repaid) | £250,000 lump sum needed |
| Total cost over term | £417,000 | £593,750 |
| Best for | Residential homeowners | BTL investors (tax efficiency) |
Interest-only rates are typically 0.5–1% higher than repayment rates. BTL mortgages are usually interest-only with a minimum 25% deposit.
Mortgage Market Update 2026
The Bank of England base rate stands at 4.5% as of early 2026, following gradual cuts from the 5.25% peak in late 2023. Average 2-year fixed rates are 4.2–5.5% depending on LTV, and 5-year fixes are 4.0–5.2%. Tracker rates follow the base rate and offer flexibility but more payment uncertainty.
Key trends affecting borrowers in 2026:
- Stress testing: Lenders test affordability at approximately 7–8%, limiting maximum borrowing for many applicants
- Product transfers: Remortgaging onto a new deal with your existing lender is often cheaper and faster than switching lenders
- Green mortgages: Some lenders offer rate discounts of 0.1–0.2% for energy-efficient properties (EPC A or B)
- BTL squeeze: Higher rates mean many BTL properties no longer meet the 125% rental coverage requirement at stressed rates
Plan Your Complete Purchase
Your mortgage is the biggest financial commitment. Use these tools alongside:
- Affordability Calculator — check how much you can borrow before calculating repayments. Lenders use income multiples and stress tests.
- Stamp Duty Calculator — SDLT is payable on top of your deposit and cannot be added to the mortgage. Budget for it separately.
- LTV Calculator — your LTV determines your mortgage rate. See how deposit size affects your monthly payments.
- Deposit Calculator — work out your deposit target and savings timeline based on your LTV and property price goals.
- Rental Yield Calculator — for BTL investors, compare mortgage cost against rental income to check cash flow viability.
✅ Calculations verified against standard mortgage amortisation formulae, March 2026. This calculator is for guidance only. Always obtain a personalised mortgage illustration from a lender or qualified mortgage adviser.
Common Mortgage Mistakes to Avoid
1. Only comparing the headline rate. A low initial rate may come with hefty arrangement fees that wipe out the saving. Always compare the total cost over the deal period, including product fees, valuation charges, and any early-repayment penalties.
2. Stretching to the maximum borrowing limit. Lenders may offer 4.5× your income, but that does not mean it is comfortable. Factor in council tax, insurance, maintenance, and potential rate rises when your fix ends before committing to the largest loan available.
3. Ignoring the impact of term length on total interest. Extending your mortgage from 25 to 35 years lowers monthly payments but can add tens of thousands in interest over the life of the loan. On a £250,000 mortgage at 4.5%, going from 25 to 35 years adds roughly £55,000 in total interest.
4. Forgetting to budget for stamp duty separately. SDLT cannot be added to most residential mortgages. On a £350,000 home, standard stamp duty is £6,250 — that is cash you need on top of your deposit, legal fees, and moving costs.
5. Not remortgaging when your fixed deal expires. Roughly 800,000 UK homeowners sit on their lender’s standard variable rate (SVR) each year, which is typically 1–2% above the best available fixes. Switching could save £150–£300 per month on an average mortgage.
5 Steps to Getting Your Mortgage
- Check your affordability. Use an affordability calculator and review your credit report. Most lenders in 2026 cap borrowing at 4.5× gross income, though some specialist lenders go higher for certain professions.
- Get a mortgage agreement in principle (AIP). An AIP confirms what a lender is likely to offer and strengthens your position when making offers. It usually involves a soft credit check and lasts 60–90 days.
- Find the right deal and apply. Compare fixed, tracker, and discount rates across the market. A whole-of-market mortgage broker can access deals not available directly to consumers and will handle the paperwork.
- Property valuation and underwriting. The lender instructs a valuation to confirm the property is worth the purchase price. Underwriters then verify your income, outgoings, and credit history before issuing a formal mortgage offer.
- Complete and start repaying. Your solicitor draws down the mortgage funds on completion day. Your first monthly repayment is typically due one calendar month after completion. Set up a direct debit to avoid missed payments.
Repayment vs Interest-Only: Cost Comparison
The table below compares total costs over a 25-year term at a 4.5% fixed rate for both repayment and interest-only mortgages.
| Loan Amount | Repayment /month | Total Repaid (Repayment) | Interest-Only /month | Total Repaid (Interest-Only)* |
|---|---|---|---|---|
| £150,000 | £834 | £250,200 | £563 | £318,900 |
| £250,000 | £1,390 | £417,000 | £938 | £531,400 |
| £400,000 | £2,224 | £667,200 | £1,500 | £850,000 |
*Interest-only total includes the original loan repaid at the end of the term. Figures rounded to nearest £100. Rates illustrative — actual offers will vary.
Did You Know?
Pro Tips from the Experts
Mortgage brokers recommend: Lock in a rate as early as possible. Most lenders hold mortgage offers for 3–6 months, so even if you have not found a property yet, securing an AIP at today’s rate protects you against potential increases.
HMRC allows: Landlords to deduct a 20% tax credit for mortgage interest on buy-to-let properties. This replaced full interest deduction in 2020 and applies to all individual landlords. Incorporation into a limited company may allow full deduction — consult a tax adviser.
Solicitors recommend: Reading your mortgage offer in full before exchange. Key clauses to check include early repayment charges (often 1–5% of the balance), portability terms, and overpayment limits — most lenders cap penalty-free overpayments at 10% of the balance per year.
Financial advisers suggest: Building an emergency fund covering at least 3 months of mortgage payments before purchasing. With average monthly repayments around £1,300 in 2026, that means having roughly £4,000 set aside for unexpected income disruptions or urgent repairs.
Potential Savings
Remortgage Saving
£3,600 /year
Switching a £250,000 mortgage from a 7.5% SVR to a 4.5% 5-year fix saves roughly £300 per month — £3,600 a year back in your pocket.
Overpayment Saving
£22,400 total
Overpaying £100/month on a £250,000 mortgage at 4.5% over 25 years saves £22,400 in interest and clears the mortgage nearly 4 years early.
Larger Deposit Saving
£1,800 /year
Increasing your deposit from 10% to 15% on a £300,000 home typically reduces your rate by 0.3–0.5%, saving around £150/month on repayments.
Frequently Asked Questions
Everything you need to know about mortgage repayments, interest rates, and buying costs in the UK.