Mortgage Calculator
Work out your monthly mortgage payments with our free calculator. See how different interest rates, deposits, and terms affect your payments and total cost.
Enter mortgage details to calculate payments
Understanding Your Mortgage
A mortgage is a loan secured against your property. Understanding how your payments are structured helps you make better financial decisions and potentially save thousands over the life of your mortgage.
How Mortgage Interest Works
With a repayment mortgage, your monthly payment covers both interest and principal. In the early years, most of your payment goes toward interest. As you pay down the balance, more goes toward the principal.
Current Mortgage Market (2024)
Following the Bank of England base rate increases, mortgage rates have risen significantly from historic lows. Current average rates are approximately:
- 2-year fixed (90% LTV): 5.5% - 6.5%
- 5-year fixed (90% LTV): 5.0% - 6.0%
- 2-year fixed (60% LTV): 4.5% - 5.5%
- 5-year fixed (60% LTV): 4.0% - 5.0%
Tips for Getting the Best Mortgage
- Save a larger deposit to access better rates
- Check and improve your credit score before applying
- Compare deals from multiple lenders
- Consider using a mortgage broker
- Factor in all fees, not just the interest rate
Calculation Methodology
This calculator uses official HMRC PAYE algorithms for 2026/27. Rates sourced directly from gov.uk. Reviewed by a qualified ICAEW-regulated accountant.
Official Sources
Important: Results are estimates based on standard HMRC rules. Your actual tax may differ based on your specific tax code, benefits, or HMRC adjustments. Always verify with your employer or a qualified accountant.
Frequently Asked Questions
How is my mortgage payment calculated?
Monthly mortgage payments are calculated using an amortization formula that considers the loan amount, interest rate, and term. In the early years, more of your payment goes toward interest; over time, more goes toward the principal.
What deposit do I need for a mortgage?
Most lenders require a minimum 5-10% deposit. However, larger deposits (15-25%) typically get better interest rates. First-time buyers may access schemes like Help to Buy or shared ownership with smaller deposits.
What is LTV (Loan to Value)?
LTV is the ratio of your mortgage to the property value, expressed as a percentage. Lower LTV (bigger deposit) usually means better interest rates. For example, a £315,000 mortgage on a £350,000 property is 90% LTV.
Should I choose a fixed or variable rate?
Fixed rates offer payment certainty for 2-5+ years but may be higher initially. Variable/tracker rates can be lower but change with the Bank of England base rate. Your choice depends on your risk tolerance and financial situation.
What other costs should I budget for?
Beyond the mortgage, budget for: stamp duty, solicitor fees (£1,000-2,000), survey costs (£300-700), mortgage fees, buildings insurance, and moving costs. First-time buyers may be exempt from some stamp duty.