UK Mortgage Calculator
Calculate monthly repayments for a repayment or interest-only mortgage. See the full amortization schedule and how your balance reduces over time.
| Loan Amount | £224,000.00 |
| LTV Ratio | 80.0% |
| Monthly Payment | £1,245.06 |
| Total Repayable | £373,519.43 |
| Total Interest | £149,519.43 |
Amortization Summary:
| Year | Principal Paid | Interest Paid | Balance Remaining |
|---|---|---|---|
| 1 | £4,962.29 | £9,978.48 | £219,037.71 |
| 5 | £5,938.95 | £9,001.83 | £196,801.70 |
| 10 | £7,434.35 | £7,506.43 | £162,754.99 |
| 15 | £9,306.28 | £5,634.49 | £120,135.46 |
| 20 | £11,649.57 | £3,291.21 | £66,784.50 |
| 25 | £14,582.88 | £357.90 | £0.00 |
How UK Mortgages Work
A mortgage is a loan secured against a property. If you fail to make repayments, the lender has the right to repossess the property and sell it to recover the debt. UK mortgages are regulated by the Financial Conduct Authority (FCA), which requires lenders to conduct detailed affordability assessments before approving a mortgage.
The UK mortgage market is one of the most competitive in the world, with hundreds of products available. Most borrowers take out a mortgage with an initial fixed or discounted period of 2–5 years, then remortgage to a new deal when the initial period ends. Reverting to the lender's Standard Variable Rate (SVR) after a deal ends is almost always more expensive.
Repayment vs Interest-Only Mortgages
The two main repayment structures in the UK are:
| Repayment Mortgage | Interest-Only Mortgage | |
|---|---|---|
| Monthly payment | Higher (capital + interest) | Lower (interest only) |
| Balance at end | £0 — fully paid off | Full capital still owed |
| Total interest paid | Lower overall | Higher overall |
| Risk | Lower — equity builds each month | Higher — needs repayment plan |
| Availability | Widely available | Limited, typically buy-to-let |
Interest-only mortgages were widely available to homebuyers before the 2008 financial crisis. Post-crisis regulation tightened considerably and they are now primarily used for buy-to-let properties. Residential interest-only mortgages require documented repayment strategies (such as an ISA, pension, or investment portfolio).
LTV and Mortgage Rates
Your Loan-to-Value (LTV) ratio is the amount borrowed as a percentage of the property value. It is the single biggest factor — after your credit score — in determining which mortgage products and rates you can access.
LTV = (Loan Amount ÷ Property Value) × 100 Example: £224,000 loan on a £280,000 property LTV = (£224,000 ÷ £280,000) × 100 = 80%
UK mortgage products are typically priced in LTV tiers. The best rates are generally available at:
- 60% LTV — the very best rates
- 75% LTV — very good rates
- 80% LTV — competitive rates
- 85% LTV — moderate rates
- 90% LTV — higher rates, fewer lenders
- 95% LTV — highest rates, limited availability (Government Mortgage Guarantee Scheme)
Fixed, Tracker, and SVR Mortgages
Fixed rate mortgages lock your interest rate for a set period (typically 2, 3, or 5 years). Your monthly payment does not change regardless of Bank of England base rate movements. After the fixed period you are usually moved to the lender's SVR unless you remortgage.
Tracker mortgages follow the Bank of England base rate plus a set margin (e.g., base rate + 1.5%). If the base rate rises, your payment rises; if it falls, your payment falls. There is no fixed period and many tracker products have no early repayment charge.
Standard Variable Rate (SVR) is each lender's own variable rate, set at their discretion (usually somewhat correlated with the base rate). SVRs are typically 2–4% higher than best-buy fixed rates. Most financial advisers recommend avoiding SVR by remortgaging when a deal expires.
Stamp Duty and Other Purchase Costs
When budgeting for a property purchase, remember to account for costs beyond the deposit and monthly mortgage payment:
- Stamp Duty Land Tax (SDLT) — for England and Northern Ireland. Standard buyers pay 0% up to £125,000, 2% on £125,001–£250,000, 5% on £250,001–£925,000. First-time buyers pay 0% up to £425,000.
- LBTT — Land and Buildings Transaction Tax applies in Scotland instead of SDLT.
- LTT — Land Transaction Tax applies in Wales.
- Solicitor / conveyancing fees — typically £800–£2,000.
- Mortgage arrangement fee — £0–£2,000+ depending on product.
- Surveyor / valuation fees — £150–£1,500.
- Moving costs — variable.
Frequently Asked Questions
What is the difference between a repayment and interest-only mortgage?
With a repayment mortgage, your monthly payment covers both the interest charged and a portion of the capital (the amount borrowed). By the end of the term you owe nothing. With an interest-only mortgage, your monthly payment covers only the interest; the capital balance remains unchanged and must be repaid in full at the end of the term, typically from a savings vehicle, investment, or property sale. Interest-only mortgages have lower monthly payments but require a credible repayment plan for the capital.
What is LTV (Loan-to-Value) and why does it matter?
LTV is the loan amount as a percentage of the property value. For example, a £224,000 mortgage on a £280,000 property is 80% LTV. Lenders use LTV to assess risk — lower LTV means lower risk, so you receive a lower interest rate. Products typically improve at 90%, 85%, 80%, 75%, 70%, and 60% LTV thresholds. First-time buyers often need at least a 5% deposit (95% LTV), though rates are significantly better at 75% LTV or below.
What types of mortgage rate are available in the UK?
The main types are: Fixed rate — your rate is locked for a set period (commonly 2, 3, or 5 years), giving payment certainty. Tracker — your rate tracks the Bank of England base rate plus a margin; it moves up and down with base rate changes. Standard Variable Rate (SVR) — the lender's default rate, usually higher than other products; you revert to this when a fixed or tracker deal ends. Discount — a discount off the SVR for a fixed period. Most borrowers fix for 2–5 years for payment certainty.
Do I need to pay Stamp Duty on top of my mortgage?
Stamp Duty Land Tax (SDLT) is a separate upfront cost paid when purchasing a property in England or Northern Ireland. It is not part of your mortgage but may affect how much deposit you have available. SDLT rates from October 2025 start at 2% on the portion above £125,000 for standard buyers. First-time buyers pay 0% up to £425,000 and 5% on the portion from £425,001 to £625,000. Our Stamp Duty Calculator provides a full breakdown.
How much can I borrow for a UK mortgage?
Most UK lenders will lend up to 4–4.5 times your gross annual income, though some stretch to 5.5 times for high earners or certain professions. Joint applications typically use 4 times combined income. Affordability checks also consider your existing debts, credit commitments, and monthly outgoings under stress test scenarios (typically checking affordability at the lender's SVR plus 3%). The Bank of England's mortgage market rules require lenders to stress-test at higher rates.
What are typical UK mortgage arrangement fees?
Arrangement (or product) fees typically range from £0 to £2,000, sometimes expressed as a percentage of the loan. Lower-rate mortgages often carry higher fees; compare total cost over the deal period. Other costs include valuation fees (£150–£1,500 depending on property value), solicitor/conveyancer fees (£800–£2,000+), and if you use a mortgage broker their fee (£0 if fee-free, or £300–£600 typical). These costs should be considered alongside the monthly repayment.