Mortgage
Calculator UK 2026

This mortgage calculator uses the standard amortisation formula employed by UK lenders to determine your fixed monthly payment. The formula takes your total mortgage amount, applies compound interest over the full term, and produces a fixed repayment that fully clears both the capital borrowed and all interest by the end of the term. Each payment is split between an interest portion (charged on the outstanding balance) and a capital portion (which reduces your balance). In the early years of a 25-year mortgage, the majority of each payment goes towards interest. As the balance shrinks, more of each payment reduces the capital.

For example, a £300,000 mortgage at 5.50% over 25 years costs £1,838 per month in capital and interest. Over 25 years you will pay £251,408 in total interest, making the true cost of your home £551,408. Switching to fortnightly payments of £919 saves approximately £35,000 in interest and pays off the mortgage about 3 years earlier. This is because fortnightly payments result in 26 half-payments per year, which equals 13 full monthly payments instead of 12, accelerating your capital reduction.

Understanding UK Mortgage Types

The UK mortgage market offers several distinct product types. Fixed-rate mortgages lock your rate for a set period, most commonly 2, 3, or 5 years. Two-year fixes offer the lowest initial rates but require remortgaging more frequently, incurring arrangement fees each time. Five-year fixes provide longer certainty and are increasingly popular among borrowers who value stability. Tracker mortgages follow the Bank of England base rate plus a set margin, so if the base rate is 4.50% and your tracker margin is 1.00%, you pay 5.50%. Your payments move up or down as the base rate changes. The Standard Variable Rate (SVR) is each lender's default rate, typically 6.5% to 8.0%, which you revert to after your initial deal expires. Always remortgage before reverting to the SVR to avoid paying hundreds of pounds more each month than necessary.

LTV Bands and How They Affect Your Rate

Loan-to-Value (LTV) is the single biggest factor determining the interest rate available to you. UK lenders price mortgages in LTV bands: 95%, 90%, 85%, 80%, 75%, and 60%. The best rates are reserved for borrowers at 60% LTV or below. On a £300,000 property, the difference between a 90% LTV rate (5.8%) and a 75% LTV rate (5.0%) on a £225,000 mortgage is roughly £100 per month. Even a small increase in your deposit that moves you into the next LTV band can save thousands over the deal period. When choosing your deposit amount, target the nearest LTV threshold to maximise your rate benefit.

Stamp Duty Land Tax (SDLT)

Stamp Duty Land Tax applies to property purchases in England and Northern Ireland. The current thresholds are 0% on the first £250,000, 5% from £250,001 to £925,000, 10% from £925,001 to £1,500,000, and 12% above £1,500,000. First-time buyers benefit from a relief that raises the nil-rate threshold to £425,000 on properties worth up to £625,000. On a £375,000 property, a standard buyer pays £6,250 in stamp duty, whilst a first-time buyer pays nothing. Scotland uses Land and Buildings Transaction Tax (LBTT) and Wales uses Land Transaction Tax (LTT), both with different thresholds and rates. This calculator shows capital and interest only, so remember to budget separately for stamp duty and other purchase costs.

The True Cost of Your Mortgage

Many UK homebuyers focus on the monthly payment without considering the total cost over the full term. On a £300,000 mortgage at 5.50% over 25 years, you will repay approximately £551,000, meaning you pay nearly as much in interest (£251,000) as the original amount borrowed. This is why even small rate reductions matter enormously. Reducing your rate by just 0.25% on a £300,000 mortgage saves roughly £13,000 over 25 years. Similarly, overpaying by just £100 per month can cut several years off your term and save tens of thousands in interest. Most UK lenders allow overpayments of up to 10% of the outstanding balance per year without early repayment charges. Understanding the true lifetime cost empowers you to negotiate harder on rates, make strategic overpayments, and build equity faster.