Mortgage Calculator

Monthly payments are calculated using the standard amortisation formula. The calculation takes your loan amount (house price minus deposit), interest rate, and mortgage term to determine a fixed monthly payment that covers both principal and interest over the full term.

Loan to Value (LTV) is the ratio of your mortgage loan to the property's value, expressed as a percentage. For example, if you buy a £250,000 home with a £25,000 deposit, your LTV is 90%. Lower LTV ratios typically qualify for better interest rates. Most lenders require an LTV of 95% or below, and the best rates are usually available at 60% LTV or less.

Stamp Duty Land Tax (SDLT) in England and Northern Ireland is calculated on a tiered basis. You pay 0% on the first £250,000, 5% on the portion from £250,001 to £925,000, 10% from £925,001 to £1,500,000, and 12% on anything above £1,500,000. The tax is only paid on the portion of the price within each band, not on the full purchase price.

Scotland uses Land and Buildings Transaction Tax (LBTT) instead of SDLT. The bands are: 0% up to £145,000, 2% from £145,001 to £250,000, 5% from £250,001 to £325,000, 10% from £325,001 to £750,000, and 12% above £750,000.

Wales uses Land Transaction Tax (LTT). The bands are: 0% up to £225,000, 6% from £225,001 to £400,000, 7.5% from £400,001 to £750,000, 10% from £750,001 to £1,500,000, and 12% above £1,500,000.

This calculator supports mortgage terms up to 40 years. While 25 years is the most common term in the UK, many lenders now offer terms up to 35 or 40 years. A longer term reduces your monthly payments but increases the total interest you pay over the life of the mortgage.

A larger deposit reduces the amount you need to borrow, which lowers your monthly payments and total interest paid. It also reduces your LTV ratio, which can help you access better interest rates. Most UK lenders require a minimum deposit of 5% to 10% of the property price.

The year-by-year amortisation breakdown shows how each annual payment is split between principal (paying off the loan) and interest. In the early years, a larger portion goes toward interest. As the loan balance decreases, more of each payment goes toward the principal.

A fixed rate mortgage locks your interest rate for a set period, typically 2 to 5 years, giving you predictable monthly payments. A variable rate mortgage can change at any time, either tracking the Bank of England base rate (tracker mortgage) or set at the lender's discretion (standard variable rate). Fixed rates offer stability, while variable rates can be cheaper initially but carry the risk of rising payments.

Beyond the deposit and stamp duty, you should budget for solicitor or conveyancer fees (£1,000–£2,000), survey costs (£300–£1,500 depending on the type), mortgage arrangement fees (£0–£2,000), valuation fees, removal costs, and building insurance. You may also need to pay for an Energy Performance Certificate if the seller hasn't provided one. In total, these can add £3,000–£8,000 or more on top of your deposit.

An Agreement in Principle, also called a Decision in Principle, is a conditional offer from a lender confirming how much they would be willing to lend you based on a preliminary assessment of your finances. It's not a guarantee, but it shows estate agents and sellers that you're a serious buyer. Most AIPs are valid for 60 to 90 days and involve a soft credit check that won't affect your credit score.

Most UK lenders will offer between 4 and 4.5 times your annual household income, though some specialist lenders may go up to 5 or 6 times for higher earners. The exact amount depends on your income, existing debts, monthly outgoings, credit score, and the lender's affordability assessment. Use this calculator to see what different borrowing amounts mean for your monthly payments.

When your fixed rate period ends, your mortgage automatically moves to the lender's Standard Variable Rate (SVR), which is usually significantly higher. For example, a 4% fixed rate might revert to a 7% SVR. Most borrowers remortgage before or shortly after their deal ends, either with their existing lender or a new one, to secure a competitive rate and avoid overpaying.

First-time buyers in England and Northern Ireland pay no stamp duty on the first £425,000 of a property priced up to £625,000, and 5% on the portion between £425,001 and £625,000. If the property costs more than £625,000, standard rates apply. In Scotland, first-time buyers get relief on the first £175,000. Wales does not currently offer a separate first-time buyer relief for LTT. Note: this calculator shows standard rates; first-time buyer relief is not applied automatically.

With a repayment mortgage, each monthly payment covers both interest and a portion of the loan, so the debt is fully paid off by the end of the term. With an interest-only mortgage, you only pay the interest each month, meaning the original loan amount remains unchanged and must be repaid in full at the end. Interest-only mortgages have lower monthly payments but require a solid repayment plan, such as savings or investments. This calculator uses repayment mortgage calculations.

Your credit score plays a significant role in determining which mortgage deals you can access and what interest rates you'll be offered. A higher score generally means access to lower rates, which can save thousands over the life of your mortgage. Lenders also check for missed payments, defaults, CCJs, and how much existing credit you have. Before applying, check your credit report with Experian, Equifax, or TransUnion, and address any errors or outstanding issues.

An offset mortgage links your savings account to your mortgage so that your savings balance is deducted from your outstanding mortgage when calculating interest. For example, if you have a £200,000 mortgage and £30,000 in savings, you only pay interest on £170,000. You don't earn interest on your savings, but you save on mortgage interest, which can be more tax-efficient. Offset mortgages are useful for higher-rate taxpayers or those with significant savings.

Most mortgage lenders allow you to overpay up to 10% of your outstanding balance per year without early repayment charges. Overpaying reduces your loan balance faster, meaning you pay less interest overall and can finish your mortgage term earlier. Even small regular overpayments can make a significant difference. For example, overpaying £100 per month on a £200,000 mortgage at 4.5% over 25 years could save you over £20,000 in interest and shorten your term by around 4 years.

There are three main types of property survey in the UK. A basic Mortgage Valuation is arranged by the lender to confirm the property is worth the loan amount. A HomeBuyer Report (£400–£1,000) provides a more detailed inspection covering the condition of the property, potential issues, and a valuation. A full Building Survey (£600–£1,500+) is the most comprehensive, recommended for older, larger, or unusual properties, covering structural integrity and detailed defect analysis. Skipping a survey can lead to expensive surprises after purchase.