Working out your mortgage repayment before you apply for a loan is one of the most useful things you can do when buying a property. It helps you understand what you can genuinely afford, compare deals effectively, and avoid being caught short each month.

Use our Mortgage Calculator to get your repayment figure instantly.

How Is a Mortgage Repayment Calculated?

For a standard repayment mortgage, your monthly payment is calculated using this formula:

M = P × [r(1 + r)^n] / [(1 + r)^n − 1]

Where:

M = monthly payment
P = principal loan amount
r = monthly interest rate (annual rate ÷ 12)
n = total number of monthly payments (years × 12)

This looks complex, but the result is a single fixed payment each month that covers both interest and a portion of the capital.

Worked Example

Mortgage details:

Property price: £280,000
Deposit: £56,000 (20%)
Loan amount (P): £224,000
Interest rate: 4.5% per year (r = 4.5 ÷ 12 ÷ 100 = 0.00375)
Term: 25 years (n = 300 months)

Monthly payment:

M = 224,000 × [0.00375 × (1.00375)^300] / [(1.00375)^300 − 1]

M = 224,000 × [0.00375 × 3.0748] / [3.0748 − 1]

M = 224,000 × 0.011531 / 2.0748

M = 224,000 × 0.005557

M ≈ £1,245 per month

Over 25 years, you would repay approximately £373,500 in total — meaning roughly £149,500 in interest on top of your £224,000 loan.

What Affects Your Monthly Repayment?

1. Loan Amount

The larger the loan, the higher the repayment. A bigger deposit reduces the loan amount and therefore reduces your monthly payment.

2. Interest Rate

Even small changes in interest rate have a significant effect over a long term. At 3.5% vs 5.5% on a £200,000 loan over 25 years, the monthly difference is around £200/month — over £60,000 across the full term.

3. Mortgage Term

A longer term reduces your monthly payment but increases the total interest you pay. A 30-year mortgage has lower monthly payments than a 25-year mortgage on the same loan, but costs more overall.

4. Repayment vs Interest-Only

Repayment mortgage: each payment covers interest and reduces the outstanding balance
Interest-only mortgage: you only pay the interest each month — the full loan remains outstanding at the end and must be repaid separately

How Mortgage Rates Work in the UK

Most UK mortgages have an initial fixed period (typically 2 or 5 years) at a competitive rate, after which they revert to the lender’s standard variable rate (SVR), which is usually higher.

When comparing deals, look at:

Initial rate — the fixed rate for the deal period
APRC (Annual Percentage Rate of Charge) — the effective rate over the whole mortgage term, including fees
Product fees — arrangement fees charged by the lender (typically £0–£2,000)

How Much Can You Borrow?

Lenders typically offer 4 to 4.5 times your annual salary, though affordability checks also consider your monthly expenditure, existing debts, and credit history.

For a rough guide:

Salary	Approximate maximum borrowing (4.5×)
£25,000	£112,500
£40,000	£180,000
£60,000	£270,000
£80,000	£360,000

Joint applications use combined income.

Using the Mortgage Calculator

Our Mortgage Calculator lets you adjust loan amount, interest rate, and term to instantly see your monthly repayment and total interest paid. It is useful for:

Testing different deposit sizes
Comparing two and five-year fixed deals
Modelling what happens if rates change at renewal
Understanding how overpayments reduce your total interest bill

Stamp Duty Calculator — work out your upfront tax bill
Loan Calculator — for other types of borrowing
Savings Calculator — plan your deposit savings
Compound Interest Calculator