UK Mortgage Repayment Calculator
Calculates the monthly repayment on a UK capital and interest mortgage from the loan amount, term, reference rate and lender margin.
On a 25-year repayment mortgage at a nominal rate of 4.5%, the interest paid over the full term comes to about 67% of the amount borrowed. That proportion is the figure this calculator helps you see before you commit to a loan. Enter the loan amount, the term, the reference rate and the lender's margin, and it returns the monthly repayment, the nominal annual interest rate, the total interest and the total repaid over the term.
The calculator uses the standard level-payment formula, the same equal-instalment (annuity) method used to calculate a capital and interest repayment mortgage. Each month the borrower pays the same amount, but the split between interest and capital changes over time. In the early years most of each payment goes on interest, and only later does a larger share reduce the balance. This is why the debt falls slowly at first, even though the payment never changes.
The interest rate is built in two parts. The reference rate is an index that moves with market conditions, such as Bank Rate, which the Bank of England sets, or a benchmark linked to SONIA. The lender then adds a margin, known as the spread, which covers its costs and reflects its assessment of the borrower's risk. Together they form the nominal annual interest rate, which is the rate used in the monthly calculation. A fixed-rate deal holds that rate for an agreed period, so the repayment stays the same during that time.
The result covers capital and interest only. A mortgage offer can also include arrangement fees, valuation fees and the cost of buildings insurance, which lenders usually require. When comparing offers, use the annual percentage rate (APR), shown in the key facts illustration, because it includes most of these costs. The nominal rate used here does not, so it should not be used alone to compare lenders.
The term has a large effect on total cost. A longer term lowers the monthly repayment, but the total interest rises steeply. Running the calculator at several terms with the same rate shows this trade-off directly. Many borrowers plan overpayments to shorten the term, but they should check the limits in their offer first, because going beyond an allowance can trigger an early repayment charge.
The explanation below uses metric units; the calculator works in either system.
The result updates automatically.
The loan amount you're asking the lender for
Total length of the loan, in years
The reference rate the loan is linked to
The margin the lender adds on top of the reference rate
Estimated monthly repayment
Estimated figure using the standard repayment method, with equal monthly instalments
- Nominal interest rate (NIR)
- 4.40 %
- Total interest paid
- £120,411
- Total amount payable
- £270,411
How it works
Formula
How the calculation works
Mortgage Repayments: How the Monthly Figure Is Calculated
Buying a home in the UK usually means borrowing a large sum over many years, and the monthly repayment is the figure most borrowers test first. It depends on three main variables: the loan amount, the term and the interest rate. Understanding how these interact makes it easier to prepare for a conversation with a lender and to judge whether an offer fits your household budget. This calculator applies the standard repayment formula to those inputs, together with the lender's margin, and reports the figures that matter when comparing scenarios.
The level-payment formula
The calculator uses the formula for a loan repaid in equal monthly instalments:
P = C × [r × (1+r)^n] / [(1+r)^n − 1]
Here C is the loan amount, r is the monthly rate (the nominal annual rate divided by 1200) and n is the number of monthly repayments (the term in years multiplied by 12). A 25-year term gives n = 300. The bracketed part of the formula converts the loan amount into a monthly payment. At a nominal rate of 4.5%, the monthly rate is 0.375% and the factor is about 0.00556. Multiplied by the 300 repayments, it shows that the total repaid is about 1.67 times the loan, which means interest equals about 67% of the amount borrowed.
The payment is constant for the whole term, but its make-up is not. Early payments are mostly interest because the balance is still high; later payments are mostly capital. Lenders describe this as a capital and interest repayment basis, as opposed to an interest-only loan, where the monthly payment does not reduce the balance.
When the nominal rate is zero, the formula cannot be evaluated directly, because both the numerator and the denominator become zero. In that case the payment is simply the loan amount divided by the number of repayments, P = C ÷ n. The calculator handles this case so that a zero-rate scenario still returns a result.
Why the rate has two parts
The nominal annual interest rate is the sum of two components. The first is the reference rate, an index that moves with market conditions. Many variable-rate products track Bank Rate, which the Bank of England sets, while others use a benchmark such as SONIA, the overnight sterling rate that the Bank of England publishes. The second is the spread, or margin, which the lender sets. It covers the lender's costs and reflects its assessment of the borrower's risk, including factors such as the loan-to-value ratio and the strength of the application. Margins are not a published market rate, so they differ between lenders and products, and the figure stated in the offer is the one to enter.
The calculator takes the sum as one input. This means you can test a rate scenario by entering the reference rate and the margin separately, or by entering the total you expect. Either way, the total is what drives the monthly payment.
How the term changes total cost
After the rate itself, the term is the strongest lever on total cost. The figures below use the same nominal rate of 4.5% and the same loan amount, expressed as proportions of that loan.
- 15 years (180 repayments): the monthly factor is about 0.00765, and total interest is about 38% of the loan.
- 25 years (300 repayments): the monthly factor is about 0.00556, and total interest is about 67% of the loan.
- 35 years (420 repayments): the monthly factor is about 0.00473, and total interest is about 99% of the loan.
Stretching the term from 15 to 25 years lowers the monthly factor by more than a quarter, yet raises the interest from about 38% to about 67% of the loan. Going to 35 years reduces the monthly factor again, but the interest then approaches the amount borrowed. A longer term is therefore a choice about cash flow in the short run, paid for in total interest over the life of the loan.
What the calculator does not include
The result covers capital and interest only. A real offer can contain other costs that the calculator does not model:
- arrangement or product fees, which may be paid up front or added to the loan
- valuation and legal costs
- buildings insurance, which lenders usually require, and life cover if it is made a condition of the loan
- any ongoing charges attached to the product
If a fee is added to the loan, the loan amount itself increases, so enter the larger figure to see the effect. For a like-for-like comparison between offers, the indicator to use is the APR, the annual percentage rate. It is calculated on the standard basis set out in the FCA's Mortgage Conduct of Business sourcebook (MCOB), and the key facts illustration that lenders must provide shows it. The APR includes most of these costs. The nominal rate does not reflect fees, so two offers with the same nominal rate can have very different total costs.
Changes after the deal ends
The calculator assumes that the nominal rate stays the same for the whole term, which gives a fixed payment throughout. Few mortgages behave this way over their full life. A fixed-rate deal ends after an agreed period and the rate then changes. A tracker follows its reference rate, so the payment moves when that rate changes. For this reason, treat the result as a snapshot. A useful habit is to run the same loan at a higher reference rate as well as at the current one, to see how sensitive the monthly payment is. Lenders carry out affordability assessments under the rules in MCOB, and those assessments can test whether a borrower could still meet the payments if rates rose.
Overpayments and early repayment
Overpaying reduces the balance and therefore the interest that accrues afterwards. To simulate an overpayment in this calculator, enter the remaining balance as the loan amount and the remaining term in years, keeping the same nominal rate. The result is the new repayment for the remaining term. If you keep paying the original monthly amount after an overpayment, the loan ends sooner instead. That option usually reduces total interest more, so it is worth comparing both approaches.
Most UK mortgages allow overpayments up to an annual limit, often without a charge, but the limit depends on the product and the lender. Going beyond the limit can trigger an early repayment charge, which the lender sets and which is often calculated as a percentage of the amount repaid early. Read the terms in the offer before making a lump sum payment.
When not to use this calculator
- Interest-only mortgages, where the monthly payment does not reduce the balance, so the repayment formula above does not apply.
- Products with stages, such as an introductory rate that switches to a higher standard rate. Run each stage separately, with its own rate and term.
- Offset mortgages, where savings reduce the interest charged. The calculator does not model an offset balance.
- Lifetime mortgages, equity release and staged drawdown loans for self-build projects, which work differently from a standard repayment loan.
Common mistakes
- Entering the purchase price instead of the amount to be borrowed. This overstates the loan and the repayment.
- Entering the term in months instead of years. The calculator expects years and multiplies by 12 itself.
- Comparing nominal rates between offers instead of the APR.
- Using only today's reference rate and not testing a higher one.
- Ignoring fees that are added to the loan, which increases the balance on which interest is charged.
Regulation and advice
Mortgage lending and advice in the UK are regulated by the Financial Conduct Authority (FCA). The rules on affordability, and on how key information including the APR must be presented, are set out in the Mortgage Conduct of Business sourcebook (MCOB), which is part of the FCA Handbook. The Bank of England sets Bank Rate, and it publishes the current figure and the SONIA rate on its website, so both can be checked against an official source before you run a scenario. Before taking advice, check that an adviser or broker is authorised by searching the FCA Register. An authorised adviser can compare products from across the market and explain the conditions in an offer. This calculator is a planning tool. It does not replace that advice or the lender's own assessment of your circumstances.
Frequently asked questions
What is a repayment mortgage?
A repayment mortgage is a loan in which each monthly payment covers both interest and part of the capital, so the balance falls to zero by the end of the term. This calculator works out the level monthly payment for that structure. It assumes the nominal rate stays the same for the whole term, so the figure is accurate for a fixed-rate period and an estimate after that. An interest-only mortgage works differently, because the monthly payment does not reduce the balance.
What is the difference between the nominal rate and the APR?
The nominal annual interest rate is the reference rate plus the lender's margin, and it is the rate used in the monthly calculation. The annual percentage rate (APR) is a standardised figure that includes most of the costs of the loan, such as fees, and it appears in the key facts illustration. Two offers with the same nominal rate can have different APRs, so the APR is the figure to compare when choosing between lenders.
How often does the reference rate change?
It depends on the product. A tracker mortgage follows its reference rate, such as Bank Rate, so the payment can change when that rate moves, according to the terms of the offer. A fixed-rate deal keeps the same rate for an agreed period, after which it usually moves to the lender's standard variable rate unless you switch products. The Bank of England announces Bank Rate decisions and publishes the current figure on its website, so you can check the reference rate before running a scenario.
Can I overpay my mortgage?
Most UK mortgages allow overpayments up to an annual limit, often without a charge, but the limit depends on the product and the lender. Going beyond it can trigger an early repayment charge. Read the terms in your offer before making a lump sum payment. To simulate an overpayment in this calculator, enter the remaining balance and the remaining term, using the same nominal rate. The result shows the new repayment for the remaining term.
What term can I choose for a mortgage in the UK?
Each lender sets the maximum term for its products. The term usually depends on your age at the end of the mortgage, your income, the affordability checks the lender carries out under the FCA's Mortgage Conduct of Business sourcebook (MCOB) and the property itself. A longer term lowers the monthly repayment but increases the total interest, as the calculator shows. Confirm the maximum term with the lender before relying on a figure, because it can vary between offers.
Do I need a mortgage adviser?
You are not required to use an adviser, but an FCA-authorised mortgage adviser or broker can compare products from across the market and explain the conditions in an offer. Check that the adviser is authorised by searching the FCA Register. Advice may involve a fee or a commission, which should be explained before you proceed. The calculator gives an estimate for comparing scenarios, but it does not assess your eligibility for a loan.
By RivoCalc · Reviewed under our editorial methodology · Updated 5 July 2026
This calculator gives an estimate for information only and is not financial advice. Actual repayments depend on the lender's terms, fees, insurance and any changes to the interest rate. Speak to an FCA-authorised adviser or the lender before making any borrowing decision.