Loan calculator
Enter the amount, the rate and the term, and the monthly payment and full schedule are shown.
Monthly payment
1,461.48
The same amount every month for the whole term.
- Total paid438,443
- Of which interest188,443
- Number of months300
First year
| Month | Interest | Repaid | Balance |
|---|---|---|---|
| 1 | 1,041.67 | 419.81 | 249,580 |
| 2 | 1,039.92 | 421.56 | 249,159 |
| 3 | 1,038.16 | 423.31 | 248,735 |
| 4 | 1,036.40 | 425.08 | 248,310 |
| 5 | 1,034.63 | 426.85 | 247,883 |
| 6 | 1,032.85 | 428.63 | 247,455 |
| 7 | 1,031.06 | 430.41 | 247,024 |
| 8 | 1,029.27 | 432.21 | 246,592 |
| 9 | 1,027.47 | 434.01 | 246,158 |
| 10 | 1,025.66 | 435.82 | 245,722 |
| 11 | 1,023.84 | 437.63 | 245,285 |
| 12 | 1,022.02 | 439.46 | 244,845 |
How it works
A repayment loan with level payments costs the same amount every month for the whole term. What changes is the split: the interest part shrinks as the debt falls, and the repayment part grows by the same amount.
The monthly payment follows from the amount, the monthly rate and the number of months. The monthly rate is the annual rate divided by twelve, which is how most lenders quote it.
The interest cost is more sensitive to the term than people expect. A thirty-year loan costs more than twice the interest of the same loan over fifteen years, because the debt stays outstanding longer.
The calculation assumes a fixed rate throughout. A variable rate is reset periodically, and the payment changes with it. Use this to compare options, not as a forecast.
Arrangement and valuation fees and early repayment charges are not included, and there is no tax relief on a residential mortgage in the United Kingdom: MIRAS was withdrawn on 6 April 2000. The APR a lender must quote is higher than the rate you enter for two reasons: the fees are counted in, and interest is paid every month, so 5 per cent becomes 5.12 per cent even with no fees at all.
What a £250,000 mortgage costs
The monthly payment and the total interest on a repayment mortgage of £250,000 at different rates, over 15 and 25 years. The figures use the same formula as the tool above.
| Rate | 15 years | 25 years | ||
|---|---|---|---|---|
| Per month | Total interest | Per month | Total interest | |
| 3% | £1,726 | £60,762 | £1,186 | £105,658 |
| 4% | £1,849 | £82,860 | £1,320 | £145,878 |
| 5% | £1,977 | £105,857 | £1,461 | £188,443 |
| 6% | £2,110 | £129,736 | £1,611 | £233,226 |
| 7% | £2,247 | £154,473 | £1,767 | £280,084 |
Level payments or falling ones
The same £250,000 at 5% over 25 years, paid off in two ways: the level payment that British lenders use, and equal capital every month, which is the usual method in some other countries. The amounts are the payment in a given month, interest and capital together.
| Level payment | Equal capital | |
|---|---|---|
| First month | £1,461 | £1,875 |
| After ten years | £1,461 | £1,458 |
| Last month | £1,461 | £837 |
| Total interest | £188,443 | £156,771 |
A repayment mortgage in the United Kingdom is normally the level payment on the left: the same amount every month, with interest taking most of it at the start and capital most of it at the end.
Paying the same amount of capital every month instead, as the right-hand column shows, costs less interest in total but far more in the early years. Few lenders offer it, but the comparison shows where the interest goes.
Fixed for a few years, not for the term
A British fixed rate is usually fixed for two, three or five years, and sometimes ten, not for the whole term. When the fix ends the mortgage moves to the lender’s standard variable rate, which is normally higher, so most borrowers remortgage or take a new deal a few months before that happens.
The calculator assumes the same rate for the whole term. Use it to compare deals and to see what a change of rate would mean, not as a forecast of what you will pay in fifteen years.
What the lender checks
Lenders work to the affordability rules in the Financial Conduct Authority’s mortgage handbook: they check that you could still pay if rates rose, and they look at your income and outgoings rather than at the property alone.
The deposit matters for the rate as much as for the size of the loan. Rates are set in bands by loan to value, and the cheapest deals usually start at 60 per cent.
Overpayments and early repayment charges
Most fixed deals allow overpayments of up to ten per cent of the balance a year without a charge. An overpayment goes straight against the capital, so it saves interest for the rest of the term, and the earlier it is made the more it saves.
Repaying more than the allowance, or the whole mortgage, during a fixed period usually triggers an early repayment charge, often a percentage of the balance that falls each year of the deal.
What the calculator leaves out
Arrangement and valuation fees, stamp duty and insurance are not included, and neither is the annual percentage rate of charge, the APRC, which lenders must quote. The APRC includes the fees and assumes the standard variable rate applies after the fixed period, so it is usually higher than the rate you first pay.