Price, deposit and loan-to-value
A UK mortgage borrows the gap between a property's price and the deposit put down against it. Put down 10% on a £300,000 property and £30,000 is the deposit, leaving £270,000 to borrow, the loan. Every payment figure on this page runs from that borrowed amount, not the sticker price.
The loan as a share of the price is the loan-to-value, or LTV, and lenders price products in bands built around it, most commonly 60%, 75%, 80%, 85%, 90% and 95%. A 90% LTV loan sits in a worse-priced band than an 85% one, so trimming a deposit from just under a threshold to just over it can move the rate on offer more than the extra deposit alone might suggest. The calculator shows which band your own numbers land in.
The monthly payment on a repayment mortgage, the kind that clears itself to zero by the end of the term, comes from the standard formula used everywhere a fixed payment amortises a loan:
Interest in the UK accrues daily but is applied monthly, and this standard monthly-compounding formula is the accepted approximation behind most lenders' own quotes. Feed in a £270,000 loan at 4.50% over 25 years and it returns £1,500.75 a month, this calculator's own default. For the general, currency-agnostic version of this maths without the fix, fee and Stamp Duty detail below, the plain Mortgage Calculator covers it.
The fix, then the SVR
Almost no UK mortgage holds one rate for its whole term. A deal fixes the rate for an initial period, commonly two, three, five or ten years, and once that ends the loan reverts automatically to the lender's Standard Variable Rate, its SVR, unless you remortgage first. The SVR sits entirely at the lender's own discretion, loosely tracking the Bank of England base rate, and it typically runs well above whatever fixed rates are on offer at the time.
This is the biggest structural difference from a mortgage that simply holds one rate throughout, and it is why the payment jump at the end of a fix matters. Take this calculator's own defaults: a £270,000 loan, 4.50% fixed for 5 years, a 25-year term. The fixed payment is £1,500.75 a month. By month 60 the balance has fallen to about £237,216. Move that onto a 7% SVR for the 20 years left and the recalculated payment becomes about £1,839.14, a jump of roughly £338, about 22.5% higher, for exactly the same remaining debt. Run your own figures above and the same jump is quantified against them.
This jump is why remortgaging is a habit rather than an event in the UK. Borrowers who want to keep paying the lowest available rate line up a new fixed deal to start the moment the old one ends, rather than letting the mortgage lapse onto the SVR for even a month. Lenders and brokers can usually issue an Agreement in Principle, a provisional lending decision from a quick check of income and credit, several months ahead, which is normally enough lead time to have a new deal ready.
Product fees, and the cost of adding one to the loan
Most fixed-rate deals carry a product or arrangement fee on top of the rate, commonly somewhere between about £995 and £1,499, though some charge nothing and a few charge more. A lower headline rate often comes bundled with a higher fee, so the fee is part of a deal's real cost, not a footnote to it.
The fee can usually be paid upfront or added to the loan. Adding it is the more comfortable choice on completion day, but it is not free: the fee then sits inside the loan for the whole term, so interest is charged on it every month for as long as the mortgage runs. A £999 fee added to a 25-year loan ends up costing meaningfully more than £999 once that interest is counted, even though the figure on the completion statement never changes. The toggle above applies this properly: switch it on and the fee joins the loan before the payment is calculated; leave it off and the fee joins the cash needed on completion day instead.
Overpaying without losing the allowance
Most fixed-rate mortgages let a borrower overpay part of the outstanding balance each year, commonly up to around 10%, without triggering an Early Repayment Charge. Go past that during a fix and the charge can claw back a real part of what the overpayment just saved, so it is worth checking the mortgage offer before setting up a regular extra payment. The allowance often disappears entirely once the fix ends and the loan reverts to the SVR, at which point many lenders allow unlimited overpayment with no charge at all.
The "Extras" section above runs a monthly overpayment against your own figures for the whole term. For the fuller overpayment story, including a lump sum today and a yearly bonus on top, the Mortgage Payoff Calculator is built specifically for that.
Repayment or interest-only
A repayment mortgage reduces the balance a little every month, alongside the interest, until it reaches zero at the end of the term. An interest-only mortgage covers only the interest, so the payment looks smaller, but the amount borrowed never falls on its own. Switch the calculator above to interest-only and the payment recalculates as simple monthly interest, with no principal included.
The honest catch is that an interest-only loan still owes the full amount on the day the term ends, in one lump sum; it does not repay itself just because the payments were made on time. Lenders require a credible separate repayment vehicle, such as savings, an investment, a pension lump sum or selling the property, and check for one before agreeing the loan. Without one, the calculator's warning above is the same shortfall a lender would flag.
Stamp Duty Land Tax on this purchase
Buying residential property in England or Northern Ireland brings Stamp Duty Land Tax, SDLT, charged in slices as the price crosses a series of thresholds, the same way income tax bands work. At today's standard rates: nothing on the first £125,000, then 2% up to £250,000, 5% up to £925,000, 10% up to £1.5 million, and 12% above that (HMRC, gov.uk/stamp-duty-land-tax). A £300,000 purchase owes £5,000 this way: nothing on the first £125,000, £2,500 on the next £125,000 at 2%, and £2,500 on the final £50,000 at 5%.
First-time buyers get more generous bands instead: nothing on the first £300,000, then 5% up to £500,000. Above £500,000 the relief disappears entirely and the standard rates apply to the full price, with no partial benefit (HMRC, gov.uk/stamp-duty-land-tax). That same £300,000 purchase owes nothing under first-time buyer relief, £5,000 less than the standard-rate figure above, exactly what the calculator's Stamp Duty table works out the moment the switch is on.
Stamp Duty is due in cash on completion, alongside the deposit and any product fee not added to the loan, which is why "Cash you need on completion day" above adds all three together rather than showing the deposit alone.
Questions people ask
What happens when my fixed rate ends?
Unless you arrange a new deal first, the mortgage automatically moves onto the lender's Standard Variable Rate, which is usually higher than the fixed rate you were paying, sometimes considerably so. Most borrowers line up a new fixed deal to start the day the old one ends, often using an Agreement in Principle arranged a few months in advance, so the mortgage never actually sits on the SVR.
Is the SVR the same as a tracker rate?
No. A tracker rate moves automatically with a named reference rate, usually the Bank of England base rate, plus a fixed margin set at the start of the deal. A Standard Variable Rate is set entirely at the lender's own discretion; it tends to loosely follow the base rate over time but the lender can move it, or choose not to, whenever it wants.
How much deposit do I need for a UK mortgage?
Most mainstream lenders ask for at least 5 to 10%, with better rates generally on offer the further a deposit pushes the loan-to-value below the common 95%, 90%, 85%, 80%, 75% and 60% pricing bands. Below a 5% deposit, far fewer mortgages are available and the ones that exist usually carry noticeably higher rates.
Do I have to pay Stamp Duty as a first-time buyer?
Often less, sometimes nothing. First-time buyer relief removes Stamp Duty entirely on the first £300,000 of a purchase and charges 5% on the slice up to £500,000. Above £500,000 the relief is lost completely and the full standard rates apply to the whole price, so there is no partial benefit on a more expensive first purchase.
Can I overpay my mortgage without a penalty?
Usually, up to a limit. Most fixed-rate deals allow overpayments of around 10% of the outstanding balance a year without an Early Repayment Charge; going beyond that during a fix can trigger one. The allowance and the exact percentage are always stated in the mortgage offer, and many lenders drop the limit entirely once the fix ends.
Repayment or interest-only, what is the real difference?
A repayment mortgage reduces what you owe every month until it reaches zero at the end of the term. An interest-only mortgage keeps the loan exactly the same size throughout and only covers the interest, so the whole amount borrowed is still owed as a single lump sum on the last day of the term, and needs a separate, credible plan to clear it.
How much could I actually borrow?
UK lenders typically start from a multiple of income, often around 4.5 times, then run a full affordability check on top. The House Affordability Calculator works out that income-multiple figure alongside a deposit, which is the natural next step before coming back here to price the actual mortgage.
This calculator gives an estimate for a standard UK residential mortgage and is not financial or lending advice. Real quotes depend on fees, credit history, valuation and each lender's own criteria, and rates, SVRs and Stamp Duty thresholds all change. Speak to a mortgage adviser or your lender, and check gov.uk for the current Stamp Duty bands, before making a decision.