Mortgage Repayment Calculator

We've created a user-friendly mortgage repayment calculator to help you plan and budget effectively.

How to use this mortgage repayment calculator

Step-by-step instructions:

1. Enter the price of the home you're interested in.
2. Input your deposit amount.
3. Choose your preferred mortgage term (length of the loan in years).
4. Type in the interest rate you anticipate or have been quoted.

Tips for accuracy

• Ensure the interest rate matches your loan type and credit profile for the most accurate outcome.
• Consider all sources of income and expenses for a realistic budget.

Examples

Scenario 1: For a £300,000 home with a 20% deposit, a 30-year term, and a 3.5% interest rate.

Scenario 2: Adjusting the down payment or interest rate and observing the difference in monthly repayments.

What is a mortgage?

A mortgage is essentially a loan specifically for financing the purchase of property. It comprises three main components: the loan amount (principal), the interest rate, and the term (length of time to repay the loan). Getting pre-approved for a mortgage is a critical first step in the home-buying process, giving you a clear idea of what you can afford.

How do you calculate a mortgage

Capital and interest: Your mortgage payments are divided into the principal, the original loan amount, and interest, the cost paid to the lender for borrowing the principal. Initially, a larger portion of your payment goes towards interest, but over time more is applied to the principal.

Mortgage term: The length of your mortgage can significantly affect your monthly payments and the total interest paid. Longer terms mean lower monthly payments but more interest over the life of the loan.

Types of mortgages: Whether you choose a fixed-rate or a variable rate mortgage will impact your interest rate and, consequently, your monthly repayments.

Understanding mortgage repayments

Monthly payments: Determined by the loan amount, interest rate, and term, your monthly mortgage payments are predictable expenses that you plan for over the duration of your mortgage.

Amortisation: This process schedules your payments so that you're paying off the interest and capital over time, eventually owning the property outright.

Impact of extra payments: Making extra payments towards your mortgage can significantly reduce the total interest paid and potentially shorten your mortgage term.

Understanding mortgage rates

How interest rates are determined: Lenders consider your credit score, down payment, loan-to-value ratio, and economic factors to determine your mortgage interest rate.

Fixed vs. adjustable rates: Fixed rates remain the same throughout the loan term, offering stability. Variable rates can fluctuate, impacting your monthly payments and overall loan cost.

Importance of shopping around: It's sensible to compare interest rates from various lenders with the help of an expert adviser to secure the best deal possible for your situation.