UK mortgage repayment calculator, 2026/27

Repayment versus interest-only

A capital repayment mortgage gradually pays down both the interest charged and a slice of the original loan each month, so the balance owed reduces steadily and reaches zero at the end of the agreed term, assuming payments are kept up. An interest-only mortgage only covers the interest each month, leaving the original loan balance unchanged, which means you need a separate, credible repayment plan (savings, investments, or sale of the property) to clear the capital when the term ends.

Interest-only monthly payments are lower for the same loan and rate, which is why they remain common for buy-to-let, where landlords often prioritise cashflow and plan to repay the capital from eventual sale of the property or refinancing rather than from monthly income.

How this is calculated

For a capital repayment mortgage, the calculator uses the standard amortisation formula, which spreads a fixed monthly payment across the whole term so that, after accounting for interest charged on the reducing balance each month, the loan is fully repaid by the final payment. Early payments are weighted more towards interest and later payments more towards capital, even though the monthly amount itself stays level.

For an interest-only mortgage, the monthly payment is simply the outstanding loan multiplied by the monthly interest rate, and stays flat for the whole term because the capital balance never reduces; the full original loan is still owed at the end.

What moves your actual rate and payment

Most UK mortgages carry an introductory fixed or tracker rate for two, three or five years, after which the loan reverts to the lender's standard variable rate unless you remortgage. Loan-to-value, credit history, income type (employed versus self-employed or director with dividend income) and the specific lender's criteria all affect the rate you are offered, sometimes significantly.

For directors paid mainly through dividends rather than salary, some lenders use a different income assessment (looking at retained company profit as well as personal drawings), which can materially change how much you can borrow compared to the figures a standard high street affordability calculator might suggest.

Which is cheaper overall, repayment or interest-only?

Interest-only has lower monthly payments but costs more in total interest over the term because the loan balance never reduces. Repayment mortgages cost more each month but the balance falls throughout the term, so total interest paid is usually significantly lower.

Why does my mortgage payment stay the same but the interest portion change?

On a repayment mortgage the monthly amount is fixed, but as the outstanding balance falls each month, less of that fixed payment goes on interest and more goes on repaying capital, even though the total you pay each month does not change.

Does this calculator include fees?

No, it only models interest and, for repayment mortgages, capital repayment. Arrangement fees, valuation fees, legal costs and any early repayment charges are additional and should be added separately when comparing mortgage deals.

What happens if interest rates rise during my mortgage term?

This calculator assumes a constant rate for the whole term, which is unrealistic for most UK mortgages. Once any fixed or discounted period ends, your rate typically moves to the lender's standard variable rate or a new deal, changing your monthly payment.