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Mortgage Calculator UK
Mortgage Amount - £
Interest Rate - %
Term - Years
Calculate

Full Monthly Payment

£788.61

Interest Only

£343.50

Months

300

Total Interest Payable

£56,581.78
Yearly Capital & Interest Payment Breakdown
Year
Interest Paid
Capital Paid
Mortgage Balance
1
£4,065.58
£5,397.69
£174,602.31
2
£3,940.67
£5,522.60
£169,079.71
3
£3,812.86
£5,650.41
£163,429.30
4
£3,682.10
£5,781.17
£157,648.13
5
£3,548.32
£5,914.95
£151,733.18
6
£3,411.43
£6,051.84
£145,681.34
7
£3,271.38
£6,191.89
£139,489.45
8
£3,128.09
£6,335.18
£133,154.27
9
£2,981.48
£6,481.79
£126,672.48
10
£2,831.48
£6,631.79
£120,040.69
11
£2,678.01
£6,785.26
£113,255.43
12
£2,520.99
£6,942.29
£106,313.14
13
£2,360.33
£7,102.94
£99,210.20
14
£2,195.95
£7,267.32
£91,942.88
15
£2,027.77
£7,435.50
£84,507.38
16
£1,855.70
£7,607.57
£76,899.81
17
£1,679.65
£7,783.62
£69,116.18
18
£1,499.52
£7,963.75
£61,152.43
19
£1,315.22
£8,148.05
£53,004.38
20
£1,126.66
£8,336.61
£44,667.78
21
£933.74
£8,529.53
£36,138.24
22
£736.35
£8,726.92
£27,411.32
23
£534.39
£8,928.88
£18,482.44
24
£327.76
£9,135.51
£9,346.93
25
£116.35
£9,346.93
£-0.00
Monthly Capital & Interest Payment Breakdown
Month
Interest Paid
Capital Paid
Mortgage Balance
1
£343.50
£445.11
£179,554.89
2
£342.65
£445.96
£179,108.94
3
£341.80
£446.81
£178,662.13
4
£340.95
£447.66
£178,214.47
5
£340.09
£448.51
£177,765.96
6
£339.24
£449.37
£177,316.59
7
£338.38
£450.23
£176,866.36
8
£337.52
£451.09
£176,415.28
9
£336.66
£451.95
£175,963.33
10
£335.80
£452.81
£175,510.52
11
£334.93
£453.67
£175,056.85
12
£334.07
£454.54
£174,602.31
13
£333.20
£455.41
£174,146.90
14
£332.33
£456.28
£173,690.63
15
£331.46
£457.15
£173,233.48
16
£330.59
£458.02
£172,775.46
17
£329.71
£458.89
£172,316.57
18
£328.84
£459.77
£171,856.80
19
£327.96
£460.65
£171,396.16
20
£327.08
£461.52
£170,934.63
21
£326.20
£462.41
£170,472.22
22
£325.32
£463.29
£170,008.94
23
£324.43
£464.17
£169,544.76
24
£323.55
£465.06
£169,079.71
25
£322.66
£465.95
£168,613.76
26
£321.77
£466.83
£168,146.93
27
£320.88
£467.73
£167,679.20
28
£319.99
£468.62
£167,210.58
29
£319.09
£469.51
£166,741.07
30
£318.20
£470.41
£166,270.66
31
£317.30
£471.31
£165,799.36
32
£316.40
£472.21
£165,327.15
33
£315.50
£473.11
£164,854.04
34
£314.60
£474.01
£164,380.03
35
£313.69
£474.91
£163,905.12
36
£312.79
£475.82
£163,429.30
37
£311.88
£476.73
£162,952.57
38
£310.97
£477.64
£162,474.93
39
£310.06
£478.55
£161,996.38
40
£309.14
£479.46
£161,516.92
41
£308.23
£480.38
£161,036.54
42
£307.31
£481.29
£160,555.25
43
£306.39
£482.21
£160,073.04
44
£305.47
£483.13
£159,589.90
45
£304.55
£484.06
£159,105.85
46
£303.63
£484.98
£158,620.87
47
£302.70
£485.90
£158,134.96
48
£301.77
£486.83
£157,648.13
49
£300.85
£487.76
£157,160.37
50
£299.91
£488.69
£156,671.68
51
£298.98
£489.62
£156,182.06
52
£298.05
£490.56
£155,691.50
53
£297.11
£491.49
£155,200.00
54
£296.17
£492.43
£154,707.57
55
£295.23
£493.37
£154,214.20
56
£294.29
£494.31
£153,719.88
57
£293.35
£495.26
£153,224.63
58
£292.40
£496.20
£152,728.42
59
£291.46
£497.15
£152,231.27
60
£290.51
£498.10
£151,733.18
61
£289.56
£499.05
£151,234.13
62
£288.61
£500.00
£150,734.13
63
£287.65
£500.95
£150,233.17
64
£286.69
£501.91
£149,731.26
65
£285.74
£502.87
£149,228.39
66
£284.78
£503.83
£148,724.56
67
£283.82
£504.79
£148,219.77
68
£282.85
£505.75
£147,714.02
69
£281.89
£506.72
£147,207.30
70
£280.92
£507.69
£146,699.62
71
£279.95
£508.65
£146,190.96
72
£278.98
£509.62
£145,681.34
73
£278.01
£510.60
£145,170.74
74
£277.03
£511.57
£144,659.17
75
£276.06
£512.55
£144,146.62
76
£275.08
£513.53
£143,633.10
77
£274.10
£514.51
£143,118.59
78
£273.12
£515.49
£142,603.10
79
£272.13
£516.47
£142,086.63
80
£271.15
£517.46
£141,569.17
81
£270.16
£518.44
£141,050.73
82
£269.17
£519.43
£140,531.29
83
£268.18
£520.43
£140,010.87
84
£267.19
£521.42
£139,489.45
85
£266.19
£522.41
£138,967.04
86
£265.20
£523.41
£138,443.63
87
£264.20
£524.41
£137,919.22
88
£263.20
£525.41
£137,393.81
89
£262.19
£526.41
£136,867.39
90
£261.19
£527.42
£136,339.98
91
£260.18
£528.42
£135,811.55
92
£259.17
£529.43
£135,282.12
93
£258.16
£530.44
£134,751.68
94
£257.15
£531.45
£134,220.22
95
£256.14
£532.47
£133,687.75
96
£255.12
£533.49
£133,154.27
97
£254.10
£534.50
£132,619.76
98
£253.08
£535.52
£132,084.24
99
£252.06
£536.55
£131,547.70
100
£251.04
£537.57
£131,010.13
101
£250.01
£538.59
£130,471.53
102
£248.98
£539.62
£129,931.91
103
£247.95
£540.65
£129,391.26
104
£246.92
£541.68
£128,849.57
105
£245.89
£542.72
£128,306.85
106
£244.85
£543.75
£127,763.10
107
£243.81
£544.79
£127,218.31
108
£242.77
£545.83
£126,672.48
109
£241.73
£546.87
£126,125.61
110
£240.69
£547.92
£125,577.69
111
£239.64
£548.96
£125,028.73
112
£238.60
£550.01
£124,478.72
113
£237.55
£551.06
£123,927.66
114
£236.50
£552.11
£123,375.55
115
£235.44
£553.16
£122,822.38
116
£234.39
£554.22
£122,268.16
117
£233.33
£555.28
£121,712.89
118
£232.27
£556.34
£121,156.55
119
£231.21
£557.40
£120,599.15
120
£230.14
£558.46
£120,040.69
121
£229.08
£559.53
£119,481.16
122
£228.01
£560.60
£118,920.56
123
£226.94
£561.67
£118,358.90
124
£225.87
£562.74
£117,796.16
125
£224.79
£563.81
£117,232.35
126
£223.72
£564.89
£116,667.46
127
£222.64
£565.97
£116,101.50
128
£221.56
£567.05
£115,534.45
129
£220.48
£568.13
£114,966.32
130
£219.39
£569.21
£114,397.11
131
£218.31
£570.30
£113,826.81
132
£217.22
£571.39
£113,255.43
133
£216.13
£572.48
£112,682.95
134
£215.04
£573.57
£112,109.38
135
£213.94
£574.66
£111,534.72
136
£212.85
£575.76
£110,958.96
137
£211.75
£576.86
£110,382.10
138
£210.65
£577.96
£109,804.14
139
£209.54
£579.06
£109,225.07
140
£208.44
£580.17
£108,644.91
141
£207.33
£581.28
£108,063.63
142
£206.22
£582.38
£107,481.25
143
£205.11
£583.50
£106,897.75
144
£204.00
£584.61
£106,313.14
145
£202.88
£585.73
£105,727.42
146
£201.76
£586.84
£105,140.57
147
£200.64
£587.96
£104,552.61
148
£199.52
£589.08
£103,963.52
149
£198.40
£590.21
£103,373.32
150
£197.27
£591.34
£102,781.98
151
£196.14
£592.46
£102,189.52
152
£195.01
£593.59
£101,595.92
153
£193.88
£594.73
£101,001.20
154
£192.74
£595.86
£100,405.33
155
£191.61
£597.00
£99,808.33
156
£190.47
£598.14
£99,210.20
157
£189.33
£599.28
£98,610.92
158
£188.18
£600.42
£98,010.49
159
£187.04
£601.57
£97,408.92
160
£185.89
£602.72
£96,806.21
161
£184.74
£603.87
£96,202.34
162
£183.59
£605.02
£95,597.32
163
£182.43
£606.17
£94,991.15
164
£181.27
£607.33
£94,383.81
165
£180.12
£608.49
£93,775.32
166
£178.95
£609.65
£93,165.67
167
£177.79
£610.81
£92,554.86
168
£176.63
£611.98
£91,942.88
169
£175.46
£613.15
£91,329.73
170
£174.29
£614.32
£90,715.41
171
£173.12
£615.49
£90,099.92
172
£171.94
£616.67
£89,483.25
173
£170.76
£617.84
£88,865.41
174
£169.58
£619.02
£88,246.39
175
£168.40
£620.20
£87,626.19
176
£167.22
£621.39
£87,004.80
177
£166.03
£622.57
£86,382.23
178
£164.85
£623.76
£85,758.47
179
£163.66
£624.95
£85,133.52
180
£162.46
£626.14
£84,507.38
181
£161.27
£627.34
£83,880.04
182
£160.07
£628.53
£83,251.51
183
£158.87
£629.73
£82,621.77
184
£157.67
£630.94
£81,990.84
185
£156.47
£632.14
£81,358.70
186
£155.26
£633.35
£80,725.35
187
£154.05
£634.56
£80,090.79
188
£152.84
£635.77
£79,455.03
189
£151.63
£636.98
£78,818.05
190
£150.41
£638.19
£78,179.85
191
£149.19
£639.41
£77,540.44
192
£147.97
£640.63
£76,899.81
193
£146.75
£641.86
£76,257.95
194
£145.53
£643.08
£75,614.87
195
£144.30
£644.31
£74,970.56
196
£143.07
£645.54
£74,325.03
197
£141.84
£646.77
£73,678.26
198
£140.60
£648.00
£73,030.26
199
£139.37
£649.24
£72,381.02
200
£138.13
£650.48
£71,730.54
201
£136.89
£651.72
£71,078.82
202
£135.64
£652.96
£70,425.85
203
£134.40
£654.21
£69,771.64
204
£133.15
£655.46
£69,116.18
205
£131.90
£656.71
£68,459.48
206
£130.64
£657.96
£67,801.51
207
£129.39
£659.22
£67,142.29
208
£128.13
£660.48
£66,481.82
209
£126.87
£661.74
£65,820.08
210
£125.61
£663.00
£65,157.08
211
£124.34
£664.26
£64,492.82
212
£123.07
£665.53
£63,827.29
213
£121.80
£666.80
£63,160.48
214
£120.53
£668.07
£62,492.41
215
£119.26
£669.35
£61,823.06
216
£117.98
£670.63
£61,152.43
217
£116.70
£671.91
£60,480.53
218
£115.42
£673.19
£59,807.34
219
£114.13
£674.47
£59,132.86
220
£112.85
£675.76
£58,457.10
221
£111.56
£677.05
£57,780.05
222
£110.26
£678.34
£57,101.71
223
£108.97
£679.64
£56,422.07
224
£107.67
£680.93
£55,741.14
225
£106.37
£682.23
£55,058.91
226
£105.07
£683.54
£54,375.37
227
£103.77
£684.84
£53,690.53
228
£102.46
£686.15
£53,004.38
229
£101.15
£687.46
£52,316.93
230
£99.84
£688.77
£51,628.16
231
£98.52
£690.08
£50,938.08
232
£97.21
£691.40
£50,246.68
233
£95.89
£692.72
£49,553.96
234
£94.57
£694.04
£48,859.92
235
£93.24
£695.36
£48,164.56
236
£91.91
£696.69
£47,467.86
237
£90.58
£698.02
£46,769.84
238
£89.25
£699.35
£46,070.49
239
£87.92
£700.69
£45,369.80
240
£86.58
£702.03
£44,667.78
241
£85.24
£703.36
£43,964.41
242
£83.90
£704.71
£43,259.70
243
£82.55
£706.05
£42,553.65
244
£81.21
£707.40
£41,846.25
245
£79.86
£708.75
£41,137.50
246
£78.50
£710.10
£40,427.40
247
£77.15
£711.46
£39,715.94
248
£75.79
£712.81
£39,003.13
249
£74.43
£714.17
£38,288.95
250
£73.07
£715.54
£37,573.42
251
£71.70
£716.90
£36,856.51
252
£70.33
£718.27
£36,138.24
253
£68.96
£719.64
£35,418.60
254
£67.59
£721.02
£34,697.58
255
£66.21
£722.39
£33,975.19
256
£64.84
£723.77
£33,251.42
257
£63.45
£725.15
£32,526.27
258
£62.07
£726.53
£31,799.74
259
£60.68
£727.92
£31,071.82
260
£59.30
£729.31
£30,342.50
261
£57.90
£730.70
£29,611.80
262
£56.51
£732.10
£28,879.71
263
£55.11
£733.49
£28,146.21
264
£53.71
£734.89
£27,411.32
265
£52.31
£736.30
£26,675.02
266
£50.90
£737.70
£25,937.32
267
£49.50
£739.11
£25,198.21
268
£48.09
£740.52
£24,457.69
269
£46.67
£741.93
£23,715.76
270
£45.26
£743.35
£22,972.41
271
£43.84
£744.77
£22,227.65
272
£42.42
£746.19
£21,481.46
273
£40.99
£747.61
£20,733.84
274
£39.57
£749.04
£19,984.81
275
£38.14
£750.47
£19,234.34
276
£36.71
£751.90
£18,482.44
277
£35.27
£753.34
£17,729.10
278
£33.83
£754.77
£16,974.33
279
£32.39
£756.21
£16,218.12
280
£30.95
£757.66
£15,460.46
281
£29.50
£759.10
£14,701.36
282
£28.06
£760.55
£13,940.81
283
£26.60
£762.00
£13,178.80
284
£25.15
£763.46
£12,415.35
285
£23.69
£764.91
£11,650.43
286
£22.23
£766.37
£10,884.06
287
£20.77
£767.84
£10,116.23
288
£19.31
£769.30
£9,346.93
289
£17.84
£770.77
£8,576.16
290
£16.37
£772.24
£7,803.92
291
£14.89
£773.71
£7,030.20
292
£13.42
£775.19
£6,255.01
293
£11.94
£776.67
£5,478.34
294
£10.45
£778.15
£4,700.19
295
£8.97
£779.64
£3,920.56
296
£7.48
£781.12
£3,139.43
297
£5.99
£782.61
£2,356.82
298
£4.50
£784.11
£1,572.71
299
£3.00
£785.60
£787.10
300
£1.50
£787.10
£-0.00

An Introduction to the UK Mortgage Market

How Big is the UK Mortgage Market?

Across the United Kingdom around 65 thousand to 70 thousand mortgages are approved each month. This is from a low of around 30 thousand after the global financial crisis of 2008 to 2009. Prior to the recession the monthly rate was closer to 80 thousand to 130 thousand loans completed per month. In the first quarter this amounted to £63.3 billion in new loan originations.

At the end of the first quarter of 2019 there were £1.355 trillion in unsecuritised home loans with £95.896 billion in securitised home loans. Overall residential loans to individuals summed to £1.451 trillion across 13,449,147 loans.

Overall mortgage debt tends to grow around 3% to 6% per annum, though there can be significant fluctuations in that rate due to factors like BREXIT, the global economc crisis which happened in 2008, etc. Segments of the market can change faster than the overall market due to those same sorts of factors along with various legal changes tied to foreign property ownership, the localised balance between immigration & construction, etc.

Market Composition

Around 92% of all mortgages used fixed rates in the first quarter of 2019, with the average fixed rate loan priced at 2.29%. The average variable rate loan was priced at 2.57%, bringing the overall market average to 2.31%.

60% of gross advances were made for home purchases, while around 1/3 of the market was for remortgage. Future advances & the other category round out the market at around 3% each. Breaking down the home purchase figures further, 19.2% were loans to first time buyers, 13.97% were for buy to let & 26.86% was classified as other.

Looking at new commitments, 54.9% were for home purchases, 38.93% were for remortgage & the other category (including further advances) comprised of 6.17% of new commitments.

Fixed & Variable Rates

The phrase "fixed rates" has a different meaning in different markets. In most markets around the world almost all mortgages are variable rate loans which are only fixed for a limited period of time at the beginning of the loan term.

The major exception to this rule of thumb is the United States market, where the Federal government heavily subsidizes the markets. Consumers have the ability to lock in a fixed rate for up to 30 years. The United States government backs Fannie Mae & Freddie Mac purchases of mortgage securities. In the US over 90% of borrowers opt for fixed-rate loans.

The UK also has government subsidy programs in Help to Buy and Help to Buy London. These programs offer down-payment assistance, though few lenders offer loans in the UK which have fixed rates extending beyond 5 years.

Most lenders across the UK will guarantee fixed rates for 2 to 5 years while structuring the remainder of the loan term to float using a variable rate which tracks a base rate from the Bank of England. The early fixed-rate portion of the loan often comes at a deal rate which has a lower spread. If market rates move higher when rates reset it can cause a large move in monthly payments.

Red Bus in front of the Bank of England.

For example, if one owed £180,000 and their rate went from 2.29% to 3.29% an interest only payment would jump from £343.50 to £493.50 while a full monthly payment would jump from £788.61 to £880.98.

In the UK about 92% of borrowers opt for fixed rates. 58% of borrowers opt for a 2-year deal period, while 32% opt for a 5-year deal period. Only 1 in 50 mortgages come with a fixed rate longer than 5 years. Many loans with a longer fixed period come with significantly higher rates & onerous early repayment charges.

Many borrowers across the UK refinance their loans when rates reset, which is a big part of why remortgages were recently nearly 40% of new commitments. Many loans contain upfront fees to help cover administrative costs & the costs of offering lower rates. Some loan terms prohibit advance repayments.

Downpayments & Credit Scores

Most borrowers who received funding had a substantial down-payment and did not have an impaired credit history. Only 0.62% of borrowers had loans with impaired credit history.

LTV stands for loan-to-value. It is a ratio of the size of the loan against the value of the dwelling. For example, if you had a £50,000 down payment saved up for a £200,000 home this would mean your loan amount would be £150,000. £150,000 divided by £200,000 is 75% LTV.

A tiny 0.2% of gross advances went to loans with an LTV over 95%, 4.34% went to loans with an LTV between 90% & 95%. 32.38% of advances went to loans between 75% & 90%, while 63.08% of gross advances went to loans with an LTV below 75%.

Lenders prefer to lend to borrowers with relatively low LTV values. If a borrower obtained funding at a 100% LTV then any weakness in the local property market could immediately expose the lender to potential losses. For this reason, borrowers in the highest LTV quartile may pay about a 1% higher APR than those in the lower half of the market.

The High Cost of Quick Decisions

Between 2015 and 2016 nearly one in three UK consumers opted for mortgage products which cost them more than £550 more per year than cheaper alternatives which they qualified for & were readily available. This fee difference amounts to 12.7% of what consumers spend annually on their mortgage.

The remortgage market is more competitive amongst lenders than the first time buyer (FTB) market, so only around 12% of borrowers in that category opted for strongly dominated product choices. About 18% of first time buyers fall into the strongly dominated product choice category & well over 20% of mover mortgages fall in this category. Movers who are in a rush often make emotionally-driven or time-sensitive choices which compromise their ability to get the best deal the way a person remortgaging can.

About 14% of borrowers in the top credit score quartile obtained strongly dominated products, while over 20% of consumers in the bottom quartile did. In general people who are young, have low incomes, have low credit scores, have a limited down payment and/or have other factors that make their transaction more complex like moving are more likely to get a worse deal on their loan.

Due to the large price difference between loan products, around 70% of borrowers seek independent intermediaries to help them compare loans instead of going directly to a lender. When comparing loans it is best to look at the total loan cost in Annual Percentage Rate (APR) instead of the interest rate in isolation, as the former gives you a multidimensional view which incorporates the full cost of financing inclusive of arrangement, valuation & survey fees along with any other expenses.

How Much Can You Afford to Borrow?

Lenders generally prefer borrowers to have a singificant down payment. Lenders typically want at least a 5% down payment. This means if a house was valued at £180,000 a lender would want £9,000 down & would be willing to lend £171,000. Some lenders may offer first time buyers a 100% mortgage with a £0 deposit, but obtaining that sort of loan will usually force one to pay at least a percent higher interest rate on their loan.

If you know the rough interest rate you will be charged on a loan then you can easily use the above calculator to figure out how much home you can afford. The above calculator at 2.29% APR on a £180,000 home loan would require a £788.61 full repayment or £343.50 as an interest-only payment. If your max monthly budget for a home payment were £1,000 a month you would then divide this amount by the above payments to get the equivalent loan principal. Example table shown below.

Default Calculation

Loan Type
Loan Amount
Interest Rate
Monthly Payment
Interest Only
£180,000
2.29% APR
£343.50
Fully Amortising
£180,000
2.29% APR
£788.61

New Calculation

Loan Type
Interest Only
Full Repayment
 
Monthly Payment
£1,000
£1,000
 
Old Monthly Payment
£343.50
£788.61
 
Payment Conversion
£1,000 / £343.50 = 2.9112
£1,000 / £788.61 = 1.2681
 
Old Loan Amount
£180,000
£180,000
 
New Loan Amount
£180,000 * 2.9112 = £524,016
£180,000 * 1.2681 = £228,258
 
Home Value at 95% LTV
£524,016 / 0.95 = £551,596
£228,258 / 0.95 = £240,272
 
 
5% Down Payment
£551,596 - £524,016 = £27,580
£240,272 - £228,258 = £12,014
 

The above calculations consider the principal and interest portion of the mortgage payment, but do not cover other aspects of ownership. If your property taxes cost per £1,200 year that would be £100 per month. You would need to subtract that & any other expenses like insurance or common dwelling fees before calculating the remaining principal and interest portion of your monthly payment.

If you had £200 in other monthly ownershil related fees then this might take a renter equivalent of £1,000 down to £800.

Also, if you had a different interest rate on offer then you would need to use that interest rate in your calculations versus what our calculator shows as a default.

Want to Pay Your Loan Off Quicker?

Houses Made of Pound Sterling.

With strong property prices it is not uncommon for people to take out loans extending beyond 25 years. However, with the rise of technology and automation who knows what the world will look like in a quarter century? Paying extra on your home means your balance is lower today AND your balance is lower tomorrow. The earlier you make extra payments the more interest expense you will save because early extra payments reduce your balance for the duration of the loan.

If you wanted to set a goal to pay off a loan in 15 years but originally took out a 25-year mortgage then adjust the above calculator to 15 years. A £180,000 loan structured over 25 years will see the borrower pay £56,581.78 in interest over the life of the loan. If the same loan was paid off in 15-years the monthly payment would jump from £788.61 to £1,182.51 but the total interest expense would fall to £32,851.43 — a savings of £23,730.35.

Arrears & Foreclosures

You are obligated to regularly pay your mortgage & if you fall behind the lender may seize the home.

0.99% of loan balance volume was in arrears at the end of the quarter while 1.35% of total loans were in arrears.

In the first quarter lenders took new position of 2,270 units, while selling off 1,751 units, leaving an ending stock of 3,820 units.

Equity Release Mortgages

Rising longevity coupled with rising living costs has forced many elderly people to use their home equity to help pay for living expenses, or the expenses of their own parents or children. Stamp duty fees and the hassle of moving make equity release relatively appealing when compared to the cost of downsizing.

People 55+ typically use one of two types of loans to leverage their built up equity.

Of the two options, the lifetime mortgage option is far more popular with consumers.

Reference Resources

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