How to Use Our UK Mortgage Calculator
Planning your dream home in the UK? Instantly see what your monthly mortgage payments could be with our free, easy-to-use calculator. Getting an accurate estimate is a crucial first step in your property journey. Follow these simple steps to understand your potential costs:
- Step 1: Enter the Property Price. Start by inputting the asking price of the property you're considering.
- Step 2: Add Your Deposit. Enter the total deposit you have saved. A larger deposit usually means a lower Loan-to-Value (LTV), which can help you secure better interest rates.
- Step 3: Set the Interest Rate (%). Use the annual interest rate from a mortgage offer you've seen or an average rate. Small changes here can significantly alter your payments.
- Step 4: Define the Mortgage Term. Choose the number of years for your mortgage. The standard term is 25 years, but adjusting this will show you the trade-off between lower monthly costs (longer term) and less total interest paid (shorter term).
Once you click 'Calculate', you'll get a clear breakdown of your monthly repayments, the total amount you'll pay back over the lifetime of the loan, and how much of that is pure interest.
Understanding Your Mortgage Results
A UK mortgage is one of the biggest financial commitments you'll ever make. This calculator helps demystify the numbers so you can budget with confidence. Here’s what the key terms mean for you:
Principal vs. Interest
Your monthly payment is split into two parts. The 'principal' is the portion that pays off the actual loan amount you borrowed. The 'interest' is the cost of borrowing the money, paid to the lender. In the early years of your mortgage, a larger part of your payment goes towards interest. The doughnut chart above visually breaks this down for you over the full term.
The Importance of the Mortgage Term
While a longer term (e.g., 30 or 35 years) reduces your monthly outgoings, you will pay substantially more in interest over the life of the loan. Use our calculator to compare a 25-year term with a 30-year term to see the long-term financial impact. This tool calculates your repayment mortgage costs. To get a broader view of affordability, you can use our House Affordability Calculator.
Frequently Asked Questions (FAQ)
How much deposit do I need for a UK mortgage?
In the UK, the minimum deposit is typically 5% of the property's purchase price, known as a 95% LTV (Loan-to-Value) mortgage. However, providing a larger deposit, such as 10% or 20%, often gives you access to a wider range of mortgage deals with more competitive interest rates.
What is Stamp Duty Land Tax (SDLT)?
Stamp Duty Land Tax (SDLT) is a tax you must pay when buying a property in England or Northern Ireland over a certain price. The rates are tiered. Note that Scotland has the Land and Buildings Transaction Tax (LBTT) and Wales has the Land Transaction Tax (LTT), which have different rates and thresholds.
What is a typical mortgage term in the UK?
The most common mortgage term in the UK is 25 years. However, many lenders offer terms ranging from 5 to 40 years. A shorter term means you'll pay off your mortgage faster and pay less interest overall, but your monthly payments will be higher. A longer term will result in lower monthly payments but a higher total interest cost.
How does Loan-to-Value (LTV) affect my mortgage?
LTV is the percentage of the property's value that you borrow. For example, a £25,000 deposit on a £250,000 property means you borrow £225,000, which is a 90% LTV. Lenders see lower LTVs (larger deposits) as less risky, so they often offer better interest rates for them.