What is the difference between a repayment and interest-only mortgage?

A repayment mortgage reduces both interest and capital each month so the loan is fully paid at term end. An interest-only mortgage only covers interest — the capital must be repaid separately at term end.

What is the maximum mortgage I can get in the UK?

Most UK lenders offer up to 4.5× your annual income. Some offer 5× or 5.5× for high earners or certain professions.

What is a tracker mortgage vs a fixed rate?

Fixed rates stay constant for the deal period. Tracker rates follow the Bank of England base rate plus a set margin, so payments change when base rates change.

How does LTV affect my mortgage rate?

Lower LTV means lower risk for the lender, so you access better interest rates. Key thresholds are 95%, 90%, 85%, 80%, 75%, and 60% LTV.

What happens at the end of my fixed rate deal?

You revert to the lender's SVR, which is typically 2–3% higher. You should remortgage to a new deal 3–6 months before your current deal expires.

UK Mortgage Calculator

Calculate your monthly repayments for a repayment or interest-only mortgage. Covers fixed, tracker, and SVR rates. All figures in GBP.

Property Price

Deposit

£20%

Interest Rate

Mortgage Term

Monthly Repayment

£1,334

Fixed rate · 80.0% LTV · 20.0% deposit

Principal: $240,000

Total Interest: $160,199

Loan Amount

£240,000

Total Interest

£160,199

Total Repaid

£400,199

LTV Ratio

80.0%

How to Use This UK Mortgage Calculator

Switch between Repayment and Interest Only tabs depending on your mortgage type.

Repayment Mortgage

Enter your Property Price, Deposit, Interest Rate, and Mortgage Term. The calculator shows your monthly repayment, total interest paid over the term, and a year-by-year repayment schedule. A repayment mortgage guarantees the loan is fully paid at the end of the term.

Interest Only Mortgage

With an interest-only mortgage you pay only the interest each month — the capital balance remains unchanged. You must have a separate repayment vehicle (ISA, pension, endowment) to clear the balance at term end. The FCA requires lenders to check you have a credible strategy.

Understanding LTV

Loan-to-Value (LTV) is your mortgage as a percentage of the property value. Lower LTV = better rates. Key thresholds: 95%, 90%, 85%, 80%, 75%, 60%. A 60% LTV typically secures the best deals.

The UK Mortgage Repayment Formula

M = P × [r(1+r)^n] / [(1+r)^n - 1]

Where:
M = Monthly repayment
P = Principal (loan amount = property price − deposit)
r = Monthly interest rate (annual rate ÷ 12)
n = Total months (term in years × 12)

Interest Only: M = P × (annual rate ÷ 12)

For a £240,000 loan at 4.5% over 25 years: monthly repayment = £1,332. In the first month, £900 is interest and £432 reduces the capital. By year 15 more than half of each payment reduces the capital.

Example: First-Time Buyer in Manchester

Ahmed's First Home Purchase

Ahmed earns £42,000 and is buying a £220,000 terraced house in Salford with a 10% deposit saved through his Lifetime ISA.

Property Price	£220,000
Deposit (10%)	£22,000
Mortgage (90% LTV)	£198,000
2-Year Fixed Rate	4.89%
Mortgage Term	25 years
Monthly Repayment	£1,143
Total Interest (25 yrs)	£142,900
Total Repaid	£340,900

Ahmed's monthly repayment is 32.6% of his take-home pay — within the typical lender affordability limit. After his 2-year fixed deal ends he should remortgage to avoid reverting to SVR.

Frequently Asked Questions

A repayment mortgage means each monthly payment reduces both the interest and the outstanding capital, so the mortgage is fully repaid at the end of the term. An interest-only mortgage means you only pay the interest each month — the full capital balance remains and must be repaid separately at term end, usually from savings, an ISA, or a pension lump sum.

Most UK lenders will offer up to 4.5× your annual income (or combined income for joint mortgages). Some specialist lenders offer 5× or even 5.5× for certain professions. The FCA's Mortgage Market Review rules require lenders to stress-test your ability to afford repayments if rates rise. A mortgage broker can identify which lenders offer the highest multiples for your circumstances.

A fixed-rate mortgage keeps your interest rate the same for the deal period (typically 2, 3, or 5 years), giving payment certainty. A tracker mortgage follows the Bank of England base rate plus a set margin (e.g., base rate + 0.75%), so payments rise and fall with rate changes. Trackers sometimes have no early repayment charges. After the initial deal period on either type, you revert to the lender's SVR unless you remortgage.

The lower your LTV (larger deposit relative to property value), the better interest rate you can access. UK rate tiers typically fall at 95%, 90%, 85%, 80%, 75%, and 60% LTV. Going from 90% to 85% LTV might save 0.3%–0.5% on your rate, which over a 25-year term can save tens of thousands of pounds. Even saving an extra £5,000 deposit to cross a threshold can be very worthwhile.

At the end of your fixed or tracker deal period, you automatically revert to your lender's Standard Variable Rate (SVR), which is typically 2–3% higher than the best available deals. You should start looking for a new deal around 3–6 months before your current deal expires. Switching to a new deal (remortgaging) can save hundreds of pounds per month.