Mortgage Payment Calculator
Work out your monthly mortgage payment and see how much you'll pay in interest over the life of the loan.
- Capital (60.9%)
- Interest (39.1%)
For every £1 you borrow, you'll pay back about £1.64 over the term.
- Capital
- Interest
Year 1 of the mortgage is roughly 65.5% interest; by year 25 that drops to about 2.3%.
| Year | Paid | Interest | Capital | End balance |
|---|---|---|---|---|
| 1 | £16,419 | £10,761 | £5,658 | £244,342 |
| 2 | £16,419 | £10,510 | £5,909 | £238,433 |
| 3 | £16,419 | £10,248 | £6,171 | £232,261 |
| 4 | £16,419 | £9,974 | £6,445 | £225,816 |
| 5 | £16,419 | £9,688 | £6,731 | £219,085 |
| 6 | £16,419 | £9,390 | £7,030 | £212,055 |
| 7 | £16,419 | £9,078 | £7,342 | £204,714 |
| 8 | £16,419 | £8,752 | £7,667 | £197,046 |
| 9 | £16,419 | £8,412 | £8,008 | £189,039 |
| 10 | £16,419 | £8,056 | £8,363 | £180,676 |
| 11 | £16,419 | £7,685 | £8,734 | £171,942 |
| 12 | £16,419 | £7,298 | £9,122 | £162,820 |
| 13 | £16,419 | £6,893 | £9,526 | £153,294 |
| 14 | £16,419 | £6,470 | £9,949 | £143,345 |
| 15 | £16,419 | £6,029 | £10,390 | £132,954 |
| 16 | £16,419 | £5,568 | £10,851 | £122,103 |
| 17 | £16,419 | £5,086 | £11,333 | £110,770 |
| 18 | £16,419 | £4,584 | £11,836 | £98,934 |
| 19 | £16,419 | £4,058 | £12,361 | £86,573 |
| 20 | £16,419 | £3,510 | £12,909 | £73,664 |
| 21 | £16,419 | £2,937 | £13,482 | £60,182 |
| 22 | £16,419 | £2,339 | £14,080 | £46,102 |
| 23 | £16,419 | £1,714 | £14,705 | £31,397 |
| 24 | £16,419 | £1,062 | £15,358 | £16,039 |
| 25 | £16,419 | £380 | £16,039 | £0 |
Information
A repayment mortgage in the UK is an amortising loan: every month for the full term you pay a fixed amount, of which part covers the interest accrued since the previous payment and the rest reduces the outstanding principal. The lender computes this level payment so that, applied every month for the full term, the loan is exactly repaid by the final instalment. The calculator above uses the same daily-compounding arithmetic: interest accrues every day on the balance still owed, and the user-typed rate is treated as the effective annual rate (AER), so the realised yearly accrual exactly matches what's quoted.
Why the early payments are mostly interest. Year 1 starts with the full loan balance still on the books. The interest charged across year 1 is therefore close to loan × rate, and the £/month payment is dominated by that interest share. As the balance falls year by year, the interest charge falls with it and the capital share grows; by the final year, almost all of each payment is capital. The breakdown table above makes this visible: in a typical 25-year £250,000 mortgage at 4.5%, roughly 70% of the year-1 payments are interest and only 30% are capital; by year 25 the ratio is inverted.
Total cost vs the loan amount. Over a 25-year term at 4.5% you pay back roughly 1.7× the loan amount. Half a million pounds borrowed at 4.5% over 25 years means ~£333,000 of interest on top. The longer the term and the higher the rate, the more dramatic this ratio, which is the value an overpayment lever creates: every extra pound paid early cancels years of compound interest on that pound.
Fixed-rate vs variable. This calculator uses a single fixed rate for the whole term. Most UK mortgages are initial-fix products (2 / 5 / 10 years) that revert to a variable rate at the end of the fix, so the real-world figure for years 6 onwards depends on where rates are at that point. Use this calc to compare like-for-like fixed scenarios; use the full planner to model rate paths year-by-year against the wider UK yield curve.
What's not in this calculator. Interest-only mortgages (capital is owed in full at term-end), product fees and arrangement charges, early-repayment charges if you remortgage during a fix, mortgage insurance and broker fees. Speak to a mortgage adviser for the all-in cost of a specific product.
FAQ
- How is the monthly payment calculated?
The monthly payment is the level amount that, applied every month for the full term, exactly repays the loan including interest. Lenders use a standard amortisation formula ("PMT") that compounds at the daily rate (1 + AER)1/365 − 1, so the realised yearly accrual matches the rate you typed. Early in the term most of each payment is interest; late in the term most is capital; the year-by-year breakdown table below shows the split.
- Is this the same calculation my lender uses?
For a standard amortising mortgage at a fixed rate, yes, to within sub-penny rounding. UK lenders compound daily on the outstanding balance and charge a level monthly payment. The figure here will match your lender's monthly direct debit when their offer document quotes the same balance, rate and term. Variable-rate / tracker mortgages can drift up or down over time; this calc uses one fixed rate for the full term and is most useful as a baseline.
- Why is so much of my early payment interest?
Each month's interest is computed on the outstanding balance at the start of that month. Year 1 of a 25-year mortgage starts with the full loan balance still on the books, so the daily interest accrual is at its highest: typically 60-80% of the payment in the first year goes to interest. As the balance falls, the interest portion shrinks and the capital portion grows. By the final year, the split is reversed (most goes to capital). The breakdown table makes this visible.
- What if I want to overpay?
Use the Mortgage Overpayment Calculator alongside this one. It takes the same inputs plus an extra monthly amount, and shows how much interest you save and how many months earlier the mortgage extinguishes. Most UK lenders allow up to 10% of the outstanding balance per year as a penalty-free overpayment.
Sources
- FCA: Mortgages (Bank of England)
Disclaimer
Not financial advice. The monthly payment figure is arithmetic on the inputs you provided. Your lender's actual offer will include product fees, arrangement charges and in some cases broker fees that don't show up here, and the rate may change at the end of an initial-fix period. Consult a qualified mortgage adviser before making a decision based on these numbers.
