Mortgage Repayment Calculator
Calculate your monthly mortgage repayments, total interest paid, LTV ratio, and see how your balance reduces over time.
How mortgage repayments work
A capital repayment mortgage splits each monthly payment into two parts: interest on the outstanding balance, and repayment of the loan itself. In the early years, most of your payment goes toward interest. Over time, as the balance reduces, more goes toward paying off the principal.
The Loan-to-Value (LTV) ratio — your mortgage amount as a percentage of the property price — is one of the biggest factors in the interest rate you'll be offered. Dropping below key thresholds (90%, 80%, 75%, 60%) typically unlocks significantly better rates.
Most UK mortgages use a fixed rate for an initial period (typically 2 or 5 years), then revert to the lender's standard variable rate (SVR). It's important to remortgage before your fixed period ends to avoid a sudden payment increase.
Frequently asked questions
- How are monthly mortgage payments calculated?
- Monthly payments are calculated using the standard amortisation formula, which accounts for compound interest. The formula takes your loan amount, annual interest rate, and term length to produce a fixed monthly payment that fully repays the loan by the end of the term.
- What is a good LTV ratio?
- Lower LTV ratios get better interest rates. Key thresholds: 60% LTV gets the best rates, 75% is very competitive, 80% is standard, 90% is higher risk with higher rates, and 95% is the maximum most lenders offer. Every 5% reduction in LTV can unlock a better rate.
- Should I choose a 25 or 30 year mortgage?
- A 25-year term has higher monthly payments but you pay significantly less interest overall. A 30-year term reduces monthly payments by around 10-15% but costs tens of thousands more in total interest. Choose based on what you can comfortably afford monthly while leaving room for rate rises.
- How much interest will I pay over the full term?
- On a typical £270,000 mortgage at 4.5% over 25 years, you'd pay around £180,000 in interest — roughly two-thirds of the original loan. This is why even small rate differences matter: 0.5% lower could save £15,000–£20,000 over the full term.
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