Mortgage Calculator UK

UK lenders typically cap borrowing at 4 to 4.5 times your annual income, though some go to 5x or more for higher earners or specific schemes. For a joint application, lenders use combined income. So a couple earning £70,000 between them might borrow around £315,000 — but the exact figure depends on outgoings, existing debt, and the lender’s affordability and stress-test rules.

This calculator works out the cost of a given loan, not the maximum you’ll be offered. For the borrowing limit, use the Mortgage Affordability Calculator, which factors in income, commitments, and the regulatory stress test.

On a repayment mortgage, each monthly payment covers the interest plus a slice of the capital, so the balance falls steadily and the debt clears by the end of the term. On an interest-only mortgage, you pay only the interest — the balance never reduces, and the full loan is still owed at the end.

Interest-only has a lower monthly cost but leaves you needing to repay the whole loan from elsewhere — selling the property, an investment, or refinancing. UK lenders now require a credible repayment plan for residential interest-only. It remains common for buy-to-let, where the lower payment improves rental yield and the plan is usually to sell or remortgage.

LTV is your loan as a percentage of the property’s value. A £270,000 loan on a £300,000 home is 90% LTV. It matters because lenders price risk in bands — the lower your LTV, the lower the rate they’ll offer, because they have more cushion if house prices fall.

The bands cluster around 95%, 90%, 85%, 75% and 60%. Pushing your deposit just over a threshold — from 89% to 85%, say — can move you into a cheaper rate tier that saves more over the term than the extra deposit cost you. It’s often the highest-return use of a few thousand extra pounds at the point of purchase.

Yes — most UK fixed deals allow penalty-free overpayments of up to 10% of the balance per year. Overpaying is one of the most powerful financial moves a homeowner can make, because every extra pound goes straight at the capital and removes all the future interest that pound would have generated.

On a £250,000 mortgage at 5%, overpaying £200 a month saves around £44,000 in interest and clears the loan roughly five years early. Because of front-loading, overpaying early is far more effective than overpaying late. Just check your deal’s annual limit first — exceed it and an early repayment charge applies.

When a fixed deal expires, you automatically roll onto your lender’s standard variable rate (SVR) — almost always the most expensive option, set entirely at the lender’s discretion. Your monthly payment can jump sharply overnight.

The fix is to remortgage before the deal ends — either to a new product with your existing lender (a “product transfer”) or to a different lender. Start the process around three months before expiry, since applications take time. Drifting onto the SVR through inertia is the single most common avoidable mortgage cost in the UK.

The base rate is the floor that UK mortgage pricing is built on. If you’re on a tracker, your rate moves directly with it — base rate up means your payment up, usually within weeks. If you’re on a fixed rate, your payment is locked for the deal period regardless of what the base rate does, but the base rate at the time you remortgage will shape the new deal you’re offered.

This is why a single interest-rate decision in London ripples through millions of household budgets. A two-point change on a £250,000 mortgage is worth around £305 a month — material money for most families.

Stamp Duty Land Tax (SDLT) is separate from your mortgage — it’s a one-off tax on the purchase price, paid at completion, not borrowed as part of the loan (though some buyers add it to their deposit budget). The amount depends on the price, whether you’re a first-time buyer, and whether it’s an additional property.

You’ll need the cash available alongside your deposit. To work out the bill for your purchase, use the Stamp Duty Calculator — budgeting for it is one of the most commonly overlooked costs of buying.

It depends on your appetite for risk and your view on where rates are heading. A fixed rate buys certainty — your payment can’t move, which makes budgeting easy, but you pay a small premium and miss out if rates fall. A tracker follows the base rate, so you benefit immediately if rates drop, but your payment rises if they climb.

Most UK borrowers choose fixed for the certainty, especially first-time buyers and anyone stretched on affordability. Trackers suit borrowers with financial headroom who can absorb a rise and want to benefit from falling rates. There’s no universally right answer — it’s a trade-off between certainty and flexibility. This is a decision where impartial guidance from MoneyHelper or a regulated broker is worth seeking.