Mortgage Repayment Calculator
Calculate your monthly mortgage repayment and see the full cost over the term. Compare repayment versus interest-only and see the impact of a 1% rate change.
Last updated: April 2026
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How mortgage repayments are calculated
A repayment mortgage uses the same annuity formula as a personal loan - each monthly payment covers the interest due that month plus a portion of the capital. Early payments are dominated by interest; as the balance falls, more of each payment reduces the capital. By the end of the term, almost all of the final payment is capital. This is why overpaying early in the mortgage term has a disproportionately large effect on total interest paid - it reduces the capital on which future interest is calculated.
Interest-only mortgages
On an interest-only mortgage, monthly payments cover only the interest - the capital balance never reduces. At the end of the term, you still owe the full original amount and need a separate repayment vehicle (typically an ISA, pension, or property sale) to clear it. Interest-only payments are significantly lower than repayment payments for the same loan, but the total cost over the term is much higher because the capital on which interest is charged never falls. Most residential lenders now require strong evidence of a repayment strategy before offering interest-only terms.
The impact of a 1% rate change
On a £250,000 mortgage, a 1% increase in interest rate adds approximately £130–£150 per month to repayments. Over a 25-year term, this adds around £40,000 in total interest. This is why mortgage rate decisions are consequential - locking in a rate before it rises, or overpaying while rates are low, can save tens of thousands of pounds over the life of the mortgage.