Mortgage Repayment Calculator: Monthly Cost, Term and Overpayments

This mortgage repayment calculator turns a loan amount, an interest rate and a term into the monthly figure you would actually pay, on repayment or interest-only. Use it to sense-check a purchase, price a remortgage quote or test what a rate rise would do to your budget. Mortgage One is a whole of market mortgage adviser that sizes monthly repayments against real lender pricing for buyers, remortgagers and landlords.

If you want the monthly figure checked against the deals you would actually qualify for, call 01202 155992 or contact Mortgage One.

How the mortgage repayment calculator works out your figure

The calculator applies the standard amortisation formula. It converts your annual rate to a monthly rate, spreads the balance across the number of months in the term, and returns a single level payment. On a UK mortgage of £250,000 at 5.54% over 25 years, that payment is £1,541.20 a month.

Three inputs move the answer and nothing else does: the loan amount, the interest rate and the term. That matters when you are working out mortgage repayments for a purchase, because the loan amount is fixed by the price less your deposit, and the rate you are then offered is set largely by the loan-to-value that deposit produces. Deposit, rate and payment are one chain, not three separate decisions, which is why running the calculator at a single rate you have seen advertised usually flatters the answer.

The split inside the payment is what surprises people. On that same £250,000 at 5.54%, the first monthly payment is £1,154.17 of interest and only £387.03 of capital. The capital share grows every month as the balance falls, which is why the early years of a mortgage clear so little debt, and why a pound overpaid in year two is worth considerably more than a pound overpaid in year twenty.

What will my mortgage repayments be on a £250,000 loan?

At 5.54%, the average two-year fixed rate in July 2026, a £250,000 repayment mortgage over 25 years costs £1,541.20 a month. On the same rate and term, £150,000 costs £924.72, £200,000 costs £1,232.96 and £300,000 costs £1,849.44. Your own rate will differ by lender and loan-to-value.

Payments scale in a straight line with the loan size once the rate and term are held still, so if you know the cost of £100,000 you can read off any other loan amount. The rate does not behave that way. A single percentage point, from 5.54% to 6.54%, adds £153 a month to that £250,000 loan, which is why watching current UK mortgage rates matters more than shaving the loan amount at the margin.

The Bank of England held Bank Rate at 3.75% on 18 June 2026, with the next decision due on 30 July 2026. Fixed pricing follows swap rates rather than the base rate directly, so a hold does not mean fixed rates stand still. If you are deciding between fixing now and waiting, run the calculator at both your quoted rate and a rate a point higher, then read it alongside the UK rate forecast before you choose.

Repayment or interest only: which basis to run in the tool

On a repayment basis, each payment clears interest plus a slice of capital, so the balance reaches zero at the end of the term. On interest only, you pay the interest alone: £1,154.17 a month on £250,000 at 5.54%, against £1,541.20 on repayment. The full £250,000 still falls due at the end.

That £387 monthly gap is not a saving, it is a deferral. Residential lenders will only write interest only where you evidence a credible repayment vehicle, typically an endowment or investment portfolio, a pension lump sum, the sale of a second property, or downsizing where there is sufficient equity headroom. Many cap interest only at a lower loan-to-value than the equivalent repayment product. Part-and-part, splitting the loan across both bases, is the usual middle route and is covered further in our guide to understanding mortgage repayments.

Running a buy-to-let mortgage on an interest-only basis

Most buy-to-let mortgages are written on interest only, so for landlords the interest-only figure is the one that matters. Size the loan first with the buy-to-let rental stress test calculator, because rental cover, not your income, sets the ceiling on a buy-to-let case. Then run the repayment calculator on an interest-only basis to get the monthly cost that sits against the rent, and keep the repayment figure to hand as well, since some lenders stress affordability on a capital and interest basis even where the product itself is interest only.

How does the mortgage term change your total interest?

Stretching the term cuts the monthly payment and raises the lifetime cost. On £250,000 at 5.54%, a 25-year term costs £1,541.20 a month and £212,359 in interest. A 30-year term drops the payment to £1,425.75 but lifts total interest to £263,271. That is £115 a month saved for £50,912 more paid.

Run it the other way and the trade reverses. A 20-year term on the same loan costs £1,725.37 a month, £184 more than the 25-year figure, but total interest falls to £164,089, saving £48,270 against the standard term. The average first-time buyer term reached 32 years in 2023, up from 30 years in 2021, which tells you how much of the market is now buying monthly affordability with lifetime cost.

The practical point is that the term is not fixed for life. It is reset at every remortgage, and a borrower whose income has risen since completion can usually shorten it without failing affordability. Testing a shorter term in the calculator before you start a remortgaging guide conversation is the cheapest interest saving available to most homeowners.

Term length is the lever most borrowers set once and never revisit, so for a free initial consultation on whether yours still fits, call 01202 155992 or contact Mortgage One.

What overpayments do to your term and total interest

Overpaying £150 a month on £250,000 at 5.54% clears the mortgage in 250 months instead of 300 and cuts total interest from £212,359 to £171,193, a saving of £41,166. Most fixed-rate products allow overpayments of up to 10% of the outstanding balance each year without triggering an early repayment charge.

The 10% allowance is the constraint worth checking before you start. Lenders differ on how they measure it: some take 10% of the balance on 1 January each year, some 10% of the original advance, and some reset on the product anniversary rather than the calendar year. Exceeding the allowance triggers an early repayment charge on the excess, which typically runs on a taper across the fixed period and is usually expressed as a percentage of the amount repaid.

Ask the lender how the overpayment is applied, because the answer changes the outcome. Some reduce the term and hold the monthly payment; others recalculate the payment down and leave the term untouched. The first saves far more interest. Some lenders also apply overpayments only at the next anniversary rather than immediately, which quietly costs you a year of compounding on every payment you make.

What the calculator leaves out of your monthly cost

The tool prices the loan, not the deal. It excludes arrangement and product fees, valuation and legal costs, buildings insurance, ground rent and service charge, and it assumes one rate for the whole term. In practice most fixed deals run for two or five years before reverting to a variable rate.

That reversion is the single largest omission. When a fixed deal ends, the balance moves onto the lender’s standard variable rate, which is set by the lender rather than tracked to the base rate and is normally well above new-business pricing. The calculator will keep showing your fixed-period payment indefinitely unless you rerun it at the reversion rate, so run both figures and diarise the remortgage window six months before the deal ends.

Product fees are the second gap. A fee added to the loan rather than paid upfront is borrowed at your mortgage rate for the full term, so a £999 fee on a 25-year mortgage costs considerably more than £999. The calculator also says nothing about whether a lender will actually advance the amount you typed in, which is an affordability question rather than an arithmetic one, and is better answered with the how much you can borrow tool.

Once you have a monthly figure you are comfortable with, the next step is finding out which lenders will price at that level for your circumstances, so call 01202 155992 or contact Mortgage One.

Back to Calculators

The information provided in this article is for general guidance only and does not constitute personal or regulated financial advice. If you’d like to understand what these moves could mean for you, speak to Mortgage One. We can explain your options and timings based on your specific circumstances.

FAQs

1. How much will my mortgage repayments be?

It depends on three things: the amount borrowed, the interest rate and the term. At 5.54% over 25 years, £250,000 costs £1,541.20 a month on a repayment basis. Change any one input and the figure moves, so run your own numbers rather than working from an average.

2. How do you work out mortgage repayments manually?

Divide the annual rate by 12 to get the monthly rate, multiply the term in years by 12 to get the number of payments, then apply the amortisation formula to the balance. In practice the calculator above does this instantly and removes the arithmetic risk.

3. What are the monthly repayments on a £150,000 mortgage?

At 5.54% over 25 years on a repayment basis, £150,000 costs £924.72 a month. On interest only at the same rate it would be £692.50 a month, with the full £150,000 still outstanding at the end of the term.

4. What are the monthly repayments on a £200,000 mortgage?

At 5.54% over 25 years on a repayment basis, £200,000 costs £1,232.96 a month. Extending to 30 years reduces that to around £1,140 but adds substantially to the total interest paid across the life of the loan.

5. How do mortgage repayments work in the early years?

Each payment covers the interest accrued that month first, with whatever is left reducing the capital. On £250,000 at 5.54%, the first payment is £1,154.17 interest and £387.03 capital. The capital share rises every month as the balance falls.

6. Can I use this calculator for an interest-only mortgage?

Yes. Select the interest-only basis and the tool returns the interest charge alone, without any capital repayment. Remember that the full balance remains outstanding at the end of the term and lenders will want to see evidence of how you intend to repay it.

7. How do I work out an early repayment charge?

Take the percentage stated in your mortgage offer for the current year of the deal and apply it to the amount being repaid above your allowance. Charges usually taper down each year of the fixed period, so the year you repay in matters as much as the amount.

8. Can a broker get a lower rate than the one I put in the calculator?

A whole of market broker can access products that are not available direct, and can identify which lenders price your loan-to-value, income type and property most favourably. Whether that beats your quoted rate depends on your case, which is what an initial consultation establishes.