Mortgage repayment calculator
A mortgage repayment calculator is a useful interactive resource if you’re considering applying for a mortgage, remortgaging or refinancing.
It gives you an indication of what your monthly repayments could be – incredibly helpful for assessing how manageable your monthly repayments will be on a standard or interest-only mortgage. You can use it to influence your decision how much you want to borrow.
How our repayment calculator works
The repayment calculator doesn’t just divide your payments by 12 (months), it gives you the opportunity to see what would happen to your mortgage payments if the interest rate was to change. It can give you peace of mind, knowing that you’ve accounted for fluctuating rates.
To use it, simply enter:
- whether you are buying alone or with a partner
- the mortgage type you are interested in
- the property price you are hoping to be able to go to
- your deposit amount
- the expected interest rate you will be paying (you can clear this to change it for the impact varying rates will have)
- how many years you expect your mortgage to run for
Our mortgage calculator does the hard work for you and gives you an idea instantly based on the information you provide. Payments are worked out with the use of an amortisation formula – a repayment formula – ensuring equal monthly payments over the term. Every repayment covers the monthly interest accrued and reduces the balance of the loan.
It is important to note that our mortgage repayment calculator tool should be used for your guidance only and must not form part of your financial decision-making process.
Understanding your monthly mortgage payments
Familiarising yourself with how your monthly mortgage payments work can help you make more informed choices.
Monthly repayments for both repayment and interest-only mortgages are shaped by three factors. They are:
- The loan amount. This is otherwise known as the principal. This is the total sum you are borrowing from a lender so you can buy your property.
- The interest rate. The annual percentage charged on your loan – this can vary by lender and the mortgage type you opt for.
- The term. The loan term refers to the duration of the mortgage. The time in which you agree to repay your loan. A 25-year mortgage was traditionally the most common, though today it’s not unheard of for them to run for anywhere between 10 and 35 years plus.
Fixed rate mortgages are usually set for a period agreed by you and the lender. This is often a two- or five-year period. Designed to ease the worries that come with fluctuating interest rates, throughout that period, you will have peace of mind knowing that your monthly repayments will stay the same. They won’t rise, even if the interest rate does.
If you opt for a variable rate or tracker rate mortgage, however, your monthly repayments will increase and decrease in line with changes to the Bank of England base rate.
Remember to factor in any mortgage arrangement fees you will be adding to your loan.
See our understanding mortgage types guide for more information.
How overpayments can reduce your mortgage term
Mortgage overpayments are popular right now, as many aim to offset the impact of the current high interest rates. Generally speaking, overpaying your mortgage is worth considering if you are in a position to. You could stand to save tens of thousands of pounds and reduce your mortgage term (whether officially or as you go). Though, each case needs to be assessed individually. There is no clear-cut answer. If your mortgage isn’t too expensive and you have savings, it might be prudent to keep things as they are. The key is that if your mortgage rate is close to or greater than your savings rate, you’re likely to be better off overpaying. Check your mortgage product doesn’t penalise you for doing so first, though.
How James Leighton can help
We can help with any mortgage-related questions you may have. Our experienced, knowledgeable team of specialists will be able to give you more guidance on how the split between interest and capital may work for you based on your current financial situation, aspirations and the type of mortgages you are looking at. Our service is tailored to your needs so we can find the most suitable options for you – this is something the repayment calculator can’t do.
Related links
See our affordability calculator for an idea of how much you might be able to borrow for a mortgage.
See our overpayment calculator for seeing how you can pay your mortgage off faster.
See our stamp duty calculator for help working out your moving costs.
Make sure your monthly mortgage repayments will be manageable. Check out our easy-to-use repayment calculator above and then get in touch to discuss further.
