Mortgage repayment calculator

How a mortgage repayment calculator works it out

On a repayment mortgage your lender sets a fixed monthly amount that clears the loan, with interest, by the end of the term. Early on, most of each payment is interest. As the balance falls, more of each payment goes towards the loan itself.

The payment changes when your rate changes, for example when a fixed rate ends, or if you overpay and your lender recalculates it.

Monthly payments by loan size

At today’s average 5 year fix of 5.22%, on a repayment mortgage:

Repayment, interest only, or part and part

With repayment, the loan is cleared by the end of the term. With interest only, your payments cover only the interest, so they are lower, but you still owe the full amount at the end and need a plan to repay it, which lenders will check. Part and part splits the loan between the two. Most home buyers use repayment.

Choosing a term

A longer term lowers the monthly payment but means paying interest for longer, so the total cost rises. On £250,000 at 5.22%, moving from 25 to 30 years cuts the payment by about £118 a month but adds about £47,000 of interest over the life of the mortgage. Many people take a longer term for affordability and overpay when they can.

Fees and overpaying

Adding a product fee to the loan saves cash today but means paying interest on the fee. Overpaying, usually up to 10% of the balance a year without a charge on a fixed rate, cuts the interest and can clear the mortgage years sooner. See the overpayment calculator and early repayment charges.