Estimate your monthly repayments and how much you'll repay for the mortgage you'd like.
Amount
Length
Interest rate
(Yearly)
Repayments
(Monthly)
More options
Setup fees
(Mortgages can have setup fees)
Interest-only
(If you're only paying interest, not repaying the mortgage)
This mortgage calculator is designed to give you a rough idea of what your monthly repayments will be for the mortgage you’d like – it uses clever maths in the background to work it out quickly, and we like to think it’s very accurate…
However, the actual monthly repayments you might get for your mortgage could be different – it all depends on the mortgage lender (the company giving you a mortgage).
The good news is that you can get a new estimate quicker and easier than you might think, (and for free) with a friendly mortgage broker…
If you’re ready to get a real mortgage estimate based on your personal circumstances, we recommend speaking to a mortgage broker – they do the hard work to find the right mortgage for you (from 1,000s of different mortgages).
If you’re not sure where to find a mortgage broker, check out Tembo¹, they’ve got award-winning customer service (and help you borrow more), or Habito¹, a great fee-free online broker.
There’s lots of maths going on behind the scenes to work out the monthly repayments (or interest rate), and as part of that we’ve used a few assumptions…
The first is that the interest is charged monthly, as most mortgages are paid monthly.
Second is that the interest rate stays the same over the life of the mortgage. In reality, the interest rate will change, normally after the initial period of the mortgage, where there is often a lower interest rate (this is normally 2 or 5 years).
Most mortgages have these initial periods, and then afterwards the interest rate increases – but typically mortgage lenders (companies that give out mortgages) allow you to switch deals to a different mortgage (with the same or another lender), so you can always be on a low rate (more on that below).
If you add any setup fees, these are added to the mortgage amount (in reality, you have the option to pay these off straight away if you want to, although most people add them to the mortgage).
If you select interest-only, then none of the mortgage is paid off, and only the interest each month is paid (these are more common with buy-to-let mortgages).
We highly recommend using a mortgage broker to find the best mortgage deal for you – you'll be sure you're getting the best deal, and they'll handle all the paperwork too.
It’s often not the best idea to look for your own mortgage deal – there’s over 20,000 mortgages out there from over 100 lenders, it’s pretty much impossible to search them all yourself – and not being on the best deal could mean paying £100s per month more than you need to.
The best way is to find a mortgage with the help of a mortgage broker, they’ll be able to search all of these mortgages for you (called whole-of-market), and narrow it down to find the best deal out there.
Not only will they find the cheapest deal, but they’ll make sure you’re on the right type of mortgage too, and with the right mortgage lender – one that you have a high chance of being approved for a mortgage with (yes, they don't give mortgages to everyone).
On top of all of that, they’ll also handle all of the paperwork and the whole mortgage process for you – they’ll apply on your behalf and make sure everything runs smoothly until the property is all yours. You just put your feet up.
All sounds pretty good right? There’s only one rule – you need to use a mortgage broker that can search all the mortgages out there (a whole-of-market broker), otherwise you can’t be sure you’re getting the best deal.
Nuts About Money tip: don’t walk into your bank and ask for a mortgage, they can’t search the whole market, they can only give you their own mortgages – and very likely not to be the best deal for you.
Not sure where to find a great mortgage broker? Don't worry, we’ve done all the research to find the best brokers out there – here’s our top picks for mortgage brokers.
Oh, and they should be able to give you a great idea of what mortgage you could get (your interest rate and monthly repayments) in about 10 minutes after signing up. You won’t need to pay any cash or commit to anything until you’re ready to apply for a mortgage.
Note: a mortgage broker and mortgage advisor are the same thing – just different names!
Most people will get a fixed rate mortgage, and here’s how they work…
A fixed rate mortgage is where there’s a set interest rate during the first few years of your mortgage (so the interest rate doesn’t change), this period is often called the initial rate period, and is normally 2 or 5 years, but can also be 3 or 7, and even 10 years.
After the initial rate period ends (the initial fixed rate period), most people will switch to a new mortgage deal (remortgage), to keep their monthly payments as low as possible. If you don’t switch deals, you'll almost certainly be paying more than you need to every month.
This is because your mortgage interest rate will automatically move to the mortgage lenders ‘Standard variable rate’ (SVR).
A standard variable rate is a mortgage lender’s default rate, so there’s no special, lower interest rate – it’s normally very high.
However, there’s no fees to repay the mortgage early (early repayment changes, ERCs). Which means you can pay it off, and switch to a new lower rate mortgage deal whenever you like (or move home without paying any extra fees).
When on a fixed rate mortgage, once the low initial rate ends, and so you start paying more interest every month on the lender’s SVR, you’re free to switch to a new lower interest rate, without paying any early repayment charges (ERCs). This is called remortgaging.
You might be thinking that sounds like lots of effort and hard work, but here’s the good bit, simply get in touch with a mortgage broker. They’ll handle everything to do with your remortgage – finding you a great new mortgage deal, and then doing all the paperwork to get it. You really don’t need to do a thing, except fill out your details (if the broker hasn’t got them already).
Nuts About Money tip: you don’t need to wait until your current mortgage deal ends to find a great new deal – you can have everything set up to go (switching deals) beforehand. We recommend starting to speak with a broker around 6 months before your current deal ends. Having said that, don't worry if your deal is ending soon or has ended already. A mortgage broker will be able to get you on to a new deal as soon as possible, just let them know.
A repayment mortgage, also called a capital and interest mortgage, is where you pay back part of the mortgage itself, and the interest, every month. Pretty straightforward right?
These are very common and you’ll most likely either have got one of these when you first got a mortgage, or be getting one if you are looking for a mortgage.
As you make repayments over the years, you'll be paying off more of the mortgage each month, and less interest (as the interest is based off of the mortgage balance at the time, which you’re slowly paying off).
And by the end of the mortgage term (how long the total mortgage is for), you’ll have fully paid off the mortgage, as the property is officially all yours with no mortgage lender involved.
An interest only mortgage is simply where you only pay off the interest of the mortgage each month, rather than the mortgage itself. So the mortgage repayments are lower, however you will need to repay the full mortgage at some point (or sell the property and repay the mortgage).
These are very common with buy-to-let mortgages, rather than with your own home, as investors (landlords) prefer to have more spare cash each month.
With interest only mortgages, you’ll need to prove how you’re going to pay off the mortgage at the end of the mortgage term. Normally, it’s simply selling the property (e.g. selling your buy-to-let property), but this is not allowed as a reason if you’re living in the home yourself (so often it’s impossible to get one on your own home, unless you have savings to pay it off).
If you’re finding the monthly mortgage payments are quite a lot, there’s a couple of things you can do to reduce these.
The first, is to extend your mortgage term – that’s how long the mortgage is for. We’ve set the default to 25 years on our mortgage calculator, but you could increase this to 30, 35 or even 40 years – the only limitation is you can’t go above the age you expect to retire (or normally 75).
Note: the current State Pension age is 66, but rising to 68, which is the age you’ll get the State Pension (the government pension), if you’re entitled to it. Although you can defer this if you like. It can be a good figure to use as an estimate of your potential retirement age. (Find out your State Pension age with our State Pension age calculator.)
With a longer mortgage term, the mortgage amount is spread over a longer period of time, and so the mortgage repayments become less each month. However, it does also mean you’ll be paying more in interest in total over the lifetime of the mortgage.
However, just because you get a higher mortgage term when you take out the mortgage, it doesn’t mean you’re stuck with it. You always have the option to remortgage (switch deals) later on, and when you do this, you can reduce (or extend) the mortgage term – or most lenders will let you change the mortgage term whenever you like on the existing mortgage.
This can be harder, but if you’re able to increase your deposit when you’re buying a home, or if you already have a mortgage, increase your equity (the amount of your own cash in the property vs a mortgage), then you’ll be able to reduce your loan-to-value.
Loan-to-value, or LTV, is a measure of how much of the property will be covered by the mortgage, rather than your own money (e.g. your deposit). So, if you have a 10% deposit, you’ll be borrowing the remaining 90% of the property price with a mortgage, and therefore your LTV will be 90%. Simple really right?
As your LTV is lower, it means less of your property is covered by a mortgage, and this means less risk for the mortgage lender when giving you a mortgage – so a higher chance of them recovering the full amount of the mortgage (if you stop paying the mortgage, more on that below).
So, lower risk for the mortgage lender means they're willing to offer more competitive mortgage rates – and this means lower monthly repayments for you too. You’ll normally see a big difference in interest rates between a 90% LTV mortgage and a 60% LTV mortgage – as the LTV drops, normally the interest rate drops too.
When comparing mortgages, the mortgage interest rate is often the first thing you’ll look at – and it’s super important, however you should ultimately look at the total cost of the mortgage over the fixed term period you’d like to have on your mortgage – that’s the 2 or 5 years period where there’s a lower interest rate (presuming you’re getting the most common fixed rate mortgage).
The total cost includes all of the fees you’ll pay, plus all the interest (the monthly repayments). Alongside the interest rate, lots of mortgage lenders will also charge a fee to take out the mortgage, called an arrangement fee – and this can vary considerably (from £0 to £1,000's).
This arrangement fee can actually be increased to lower the interest rate, making the mortgage look more appealing that it actually is – mortgage lenders know most people just look at comparison sites and ‘best buy’ tables and go for the lowest rate. So, by increasing the arrangement fee, they can reduce the interest rate and so appear at the top of the table, but still make the same amount of cash overall. Pretty sneaky isn’t it?
With that in mind, it’s best to include all the fees, and the monthly payments, and then work out the total you’ll pay over the 2 or 5 years. That way, you’ll know exactly which mortgages are cheaper (this is called the ‘overall cost’ of the mortgage).
That might sound complicated to work out, but the good news is that if you use a mortgage broker, they’ll handle all of this for you – and will look at everything to determine the best deal for you. There’s a reason why we call them the life savers of mortgages!
If you’re not sure where to find a great mortgage broker, here’s our top mortgage broker picks.
APRC stands for ‘Annual Percentage Rate of Charge’, and it shows the total cost of the mortgage over the life of the whole mortgage, so the mortgage term (e.g. 25 years).
Now, as you’re savvy with your money, you will most likely remortgage to a new, better deal after your fixed rate period ends right? (the 2 or 5 years). That means APRC is pretty useless, as it includes the higher rate of interest after the 2 or 5 years, that you’ll hopefully never actually pay (the lender's SVR).
Instead, simply compare the total cost of the mortgage over the 2 or 5 year initial period (a mortgage broker will do this for you).
Note: APRC was introduced by the Financial Conduct Authority (FCA), the people who look after financial firms, and insist that it’s shown on mortgage documents and quotes – so you’ll see it about, but it’s not great to compare mortgages.
Loan-to-value, or LTV, is one of the key things to reduce your interest rate, and so your monthly repayments. We touched on it earlier, but let’s run through it in a bit more detail.
Loan-to-value represents the amount of the property effectively ‘owned by the bank’ – it’s the amount covered by the mortgage, rather than your own money (called equity).
For instance, an LTV of 80% means that 80% of the property is covered by the mortgage, and the remaining 20% is your money, or your equity.
As a lower LTV means less is owned by the bank (covered by a mortgage), it means the mortgage lender (e.g. bank or building society) is risking less of their money to give you a mortgage, as a percentage of the property value.
This is important because they’ll probably be able to sell the property for the full value of the mortgage (getting their money back), if you stop paying the mortgage (called defaulting on your mortgage). You’ll still get back what’s left over (well normally, and you'll likely have to pay some fees).
All make sense? So, that means mortgage lenders are happy to give better mortgage deals to customers (lower interest rates) if the LTV is lower – as there’s less risk for them. Because all mortgage lenders want customers with lower LTVs (less risk), they offer lower interest rates for these customers.
To clarify, lower interest rates (lower LTV) mean lower monthly repayments, and a higher LTV means higher monthly repayments.
Note: LTV only works in 5% intervals, and always rounds up. So, for instance if your actual LTV was 66%, your LTV category would be 70% (in terms of getting a mortgage).
Although you might want to borrow a certain amount for your new home, it doesn’t necessarily mean you’ll be able to. How much you can borrow for a mortgage all depends on your total annual income (e.g. your salary), your personal circumstances and how much you spend each month.
As a rough guide, you’ll be able to borrow around 4.5x your income. So, if you earn £30,000 per year, you’ll be able to borrow £135,000 for a mortgage.
How much you can actually borrow will depend on all of your bills too – the mortgage lender will check if you can afford the monthly mortgage payments (called affordability), and work out how much spare cash you have each month. So if you have an expensive car on finance, it’s likely you won’t be able to borrow as much, or you won’t be able to get the mortgage in the first place.
However, how much you can borrow is also dependent on how much deposit you have. With most mortgage lenders, you’ll need around 90% LTV to get a mortgage. So, if you’ve got less than this amount, you won’t be able to borrow as much as you might be able to.
For instance, if you’ve got a £10,000 deposit, you’ll only be able to buy a property worth £100,000 (10% deposit or 90% LTV), even though you could actually borrow £135,000.
You could only borrow the full £135,000 in our example, if you had a £15,000 deposit, as £15,000 would represent 10% of a £150,000 property, and £135,000 is the remaining left to be covered by a mortgage (90% LTV).
You can of course, combine your income with your partner if you’re buying a property together, and together you’ll get a joint mortgage – so you can borrow more overall.
If you want to borrow a bit more than what your salary or deposit allows, there are a few options, check out guarantor mortgages and joint borrower sole proprietor mortgages – which are both types of mortgages where you can use a close family member (or family friend) to put their name and/or money to your mortgage too (to guarantee mortgage repayments).
If these sound like something you’d be interested in, check out Tembo¹ – they specialise in them, and have great service.
There we have it, how much your monthly mortgage repayments will likely be.
As a quick summary, with a lower interest rate, you’ll pay less per month, and with a higher interest rate you’ll pay more per month.
You can also reduce your monthly mortgage repayments by extending your mortgage term (depending on your estimated retirement age), although you’ll pay more in interest overall.
You can also look to reduce your loan-to-value (LTV), which can also give you access to better mortgage deals, which often come with lower interest rates, and so lower mortgage repayments.
To find the best mortgage deal for you, we recommend using a mortgage broker…
Not only will they find you the best deal from every mortgage out there (if they’re whole-of-market), but they’ll also find the right type of mortgage for you, and handle all the paperwork too – you really don’t need to worry about a thing!
If you’re not sure where to find a great one, head over to our top picks for mortgage brokers.
All the best getting a great mortgage!
Tembo will find your best deal, fast, all with award-winning service.