How the monthly payment is worked out
For a repayment mortgage the standard annuity formula is used: payment = P × i ÷ (1 − (1 + i)−n), where P is the loan, i the monthly rate and n the number of months. Example: £200,000 at 5% over 25 years = £1,169.18 a month. An interest-only mortgage pays just the interest (£833.33 a month here) and the full loan is still owed at the end.
How much can I borrow?
Most UK lenders lend around 4 to 4.5 times household income, subject to an affordability and stress test. The FCA requires lenders to check you can still afford payments if rates rise.
Frequently asked questions
Is a 25-year mortgage better than 35 years?
A shorter term means higher monthly payments but much less interest overall. Use the calculator to compare.
Does this include fees?
No. Add arrangement fees, valuation and legal costs separately.
Sources
- MoneyHelper (government-backed) – Mortgage calculator guidance
- FCA – Mortgages: affordability rules (MCOB 11)
- Bank of England – Bank Rate
Disclaimer: This calculator gives an estimate using official 2026/27 rates published on GOV.UK and devolved government sites (checked October 2026). It is not financial, tax or legal advice and may not cover every situation. Always check with the official source, HMRC, your lender or a qualified adviser before making decisions.