Do you know how much your mortgage could cost each month?
Our free mortgage calculator helps you estimate your monthly mortgage payments, the total amount you could pay over the mortgage term, and how much of that cost could be interest.
Enter your property price, deposit, interest rate and mortgage term. The calculator then estimates your loan amount and shows how your mortgage balance could reduce over time.
This can help you answer an important question: how much could I afford to borrow and what might my mortgage cost each month?
The result is an illustration rather than a mortgage offer. Your actual repayments will depend on the mortgage rate, lender, fees and terms you are offered.
How are mortgage repayments calculated?
With a standard repayment mortgage, your monthly payment covers both the interest charged by the lender and part of the amount you borrowed. At the beginning of the mortgage, a larger proportion of each payment usually goes towards interest. As the balance falls, more of your payment goes towards paying off the capital. The total interest paid over the term is highly sensitive to both the rate and the term - a 1% rise on a £300,000 mortgage over 25 years can add tens of thousands of pounds in interest.
Your interest rate and mortgage term can make a significant difference to the total amount you pay. For example, extending a mortgage over a longer term can reduce your monthly payments, but you could pay considerably more interest over the life of the mortgage.
The total interest depends on the amount borrowed, interest rate and mortgage term. A longer term can reduce the monthly payment but generally means paying interest for longer and can result in a higher total interest cost.
The calculator assumes the interest rate stays the same for the full mortgage term, so use the result as a guide rather than a quote. In practice, your rate may change when a fixed or discounted deal ends.
How much can I borrow for a mortgage?
The amount you can borrow depends on more than the value of the property or your salary. Lenders will normally look at your income, regular spending, existing debts, deposit and other financial commitments when assessing affordability. They may also consider factors such as your employment, credit history and whether you are applying alone or with someone else.
Mainstream lenders in the UK cap loans at around 4.5× gross income; specialist lenders go higher for professionals and high earners. Affordability is also driven by outgoings, dependants, deposit, and credit history. Some lenders use income multiples as part of their assessment, but there is no single borrowing limit that applies to everyone.
This means that the amount a calculator suggests you could borrow may be different from the amount a lender is willing to offer.
How does my deposit affect my mortgage?
Your deposit reduces the amount you need to borrow. For example, if you buy a £300,000 property with a £60,000 deposit, you would need a £240,000 mortgage.
A larger deposit can also reduce your loan-to-value (LTV) ratio. This is the percentage of the property’s value that you are borrowing.
Your LTV can affect the mortgage rates available to you, so increasing your deposit could potentially affect both the amount you borrow and the interest rate you are offered.
How does the mortgage term affect my repayments?
The mortgage term is the length of time you have to repay the loan.
A longer term usually means lower monthly payments because you are spreading the borrowing over more years. However, you will generally pay interest for longer, which can significantly increase the total cost of the mortgage.
A shorter term can mean higher monthly payments but less interest paid overall.
This is why it can be useful to compare different mortgage terms rather than looking only at the lowest monthly payment.
What happens if mortgage rates increase?
If you have a variable or tracker mortgage, your monthly payments can change when the interest rate changes. Even if you have a fixed-rate mortgage, your payments may change when your fixed-rate period ends and you move onto a new deal or your lender’s standard variable rate. A higher interest rate can increase your monthly payment and the amount of interest you pay over time.
The FCA requires lenders to consider the impact of potential future interest rate increases when assessing mortgage affordability.
You can use the calculator to model different interest rates and see how changes could affect your estimated monthly payments.
Should I overpay my mortgage?
Overpaying your mortgage means paying more than your required monthly payment or making additional payments towards the balance.
This can reduce the amount you owe and, depending on your mortgage terms, could reduce the total interest you pay over time.
However, some mortgages have limits on how much you can overpay without an early repayment charge. You may also have other uses for your money, such as building an emergency fund, paying off more expensive debts or investing.
Before making a large overpayment, check your mortgage terms and consider how it fits with your wider financial plans.
What other costs should I consider when buying a property?
Your mortgage payment is only one part of the cost of owning a home.
You may also need to budget for:
- your deposit
- mortgage or product fees
- legal and conveyancing costs
- valuation or survey costs
- Stamp Duty where applicable
- buildings and contents insurance
- maintenance and repairs
- Council Tax and household bills
These costs can add significantly to the amount you need to budget for when buying a property.
The calculator focuses on your mortgage repayments, so it does not include every cost associated with buying or owning a property.
Should I speak to a mortgage adviser?
A mortgage calculator can give you a useful estimate of your potential repayments, but it cannot assess your full financial circumstances or tell you which mortgage is suitable for you.
A mortgage adviser can look at your income, expenditure, deposit, borrowing requirements and circumstances, then help you understand the mortgage options available. They can also help you compare mortgage deals and guide you through the application process.
If you would like help finding a mortgage adviser, you can use the Trusted Advisor adviser matching service to find a regulated adviser suited to your needs. Alternatively, email our team at hello@trusted-advisor.co.uk and we can help you understand the next steps.