Mortgage Calculator

How is your monthly mortgage payment calculated?

This calculator uses the standard amortisation formula to work out your monthly repayment. It takes the loan amount (house price minus deposit), the annual interest rate, and the mortgage term in years to produce a fixed monthly figure that covers both interest and principal.

Each month, part of your payment goes towards interest on the remaining balance and the rest reduces the amount you owe. In the early years, a larger share goes to interest. Over time, as the balance falls, more of each payment goes towards paying down the loan itself.

Understanding loan-to-value (LTV)

LTV is the percentage of the property price that is covered by the mortgage rather than your deposit. A lower LTV typically means access to better interest rates from lenders, because the lender is taking on less risk. For example, a 20% deposit on a property gives an 80% LTV.

What does total repayable mean?

Total repayable is the full amount you would pay over the life of the mortgage, including both the original loan and all interest. The difference between the total repayable and the mortgage amount is the total interest cost.

Things to keep in mind

• This calculator assumes a fixed interest rate for the entire term. In practice, many UK mortgages have a fixed period (e.g. 2 or 5 years) before moving to a variable rate.
• The results do not include additional costs such as arrangement fees, solicitor fees, stamp duty, or insurance.
• Overpaying on a mortgage can reduce total interest and shorten the term. PennyPath's in-app mortgage tool models overpayments with annual cap limits.