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A quick repayment estimate for your mortgage: enter the amount, term and interest rate and get your monthly payment straight away.

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Mortgage details

GBP
Term
Interest rate
%
Mortgage type

Your monthly repayment

£1,390/month
25 years at 4.5%
Amount borrowed£250,000
Number of payments300
Total interest£166,874
Total to repay£416,874
Make-up of the mortgage
Capital
Interest

A guide to understanding your mortgage in 2026

The four key factors that decide how much you pay each month

Amount borrowed

Loan size & LTV

The amount you borrow is not the price of the property. The difference between the two is your deposit, and the loan as a share of the property value is the loan-to-value (LTV). Most lenders go up to 90% LTV, and some up to 95% for first-time buyers, but the best interest rates are reserved for lower LTVs (60–75%). The bigger your deposit, the cheaper your mortgage.

Example
A £300,000 home at 90% LTV: the lender advances £270,000 and you put down a £30,000 deposit. You also need to budget for Stamp Duty and buying costs on top.

Interest rate

Cost of borrowing

The interest rate is what the lender charges on the outstanding balance, and it drives your monthly payment. It is different from the APRC (Annual Percentage Rate of Charge), which also factors in arrangement and product fees so you can compare deals like for like. On a 25-year fixed deal in 2026, rates broadly run between 4.0% and 4.8% depending on the lender and your LTV. Even half a point adds up to tens of thousands over the term.

Example
£200,000 over 25 years: at 4% the payment is £1,056/month, at 5% it is £1,169/month. That £113/month gap is roughly £33,900 over 25 years.

Mortgage term

Years to repay

A longer term means a lower monthly payment but a higher total interest bill. The usual maximum in the UK is 35–40 years, though it is also capped by your age — many lenders want the mortgage repaid by the time you reach 70–75. The sensible approach is to pick the shortest term you can comfortably afford, then keep the option to overpay.

Example
£200,000 at 4.5%: over 20 years that is £1,265/month, £303,672 repaid in total. Over 30 years it is £1,013/month, but £364,813 in total — the longer term "costs" about £61,000 extra.

How much you can borrow

Affordability

Lenders cap borrowing at an income multiple, typically around 4.5 times your annual income, and then run an affordability check on top. They look at your outgoings and existing commitments (car finance, loans, childcare) and stress-test whether you could still pay if rates rose. As a rule of thumb, keep the monthly payment comfortably below 35–40% of your net pay.

Example
On a £50,000 salary, most lenders offer around 4.5× income, roughly £225,000. Other debts reduce that figure, because they count against your monthly affordability.

Use a mortgage broker or compare widely

Don't settle for your own bank's offer. A whole-of-market broker, or comparing several lenders yourself, can shave 0.2–0.5% off the rate — thousands of pounds over the deal. Many brokers are fee-free because they are paid by the lender.

Overpay when you can

Most deals let you overpay up to 10% of the balance each year with no penalty. Overpaying £200–£300 a month, or a lump sum, can knock years off the term and save tens of thousands in interest. Ask your lender to reduce the term rather than the payment.

Watch the fees and the revert rate

A headline rate can hide a hefty arrangement fee, and every deal eventually reverts to the lender's Standard Variable Rate (SVR), which is usually much higher. Compare the true cost over the deal period and diarise your remortgage date.

Comparing UK mortgage types in 2026

Choosing between a fixed, tracker or variable rate is one of the most important decisions of the whole process. Each option has pros and cons that depend on your attitude to risk, the length of the deal and where you expect the Bank of England base rate to go.

Type Indicative rate 2026 Main advantage Main risk
Fixed rate 4.0% – 4.8% Payments fixed for the deal period Early repayment charges if you leave early
Tracker Base rate + 0.5–1% Falls when the base rate is cut Payment rises if the base rate rises
Variable (SVR) 7% – 8% No early repayment charges, full flexibility Lender can change it at any time

How a repayment mortgage works: capital vs interest

On a repayment mortgage (capital and interest) the monthly payment stays the same, but its make-up shifts over time: in the early years almost all of it is interest. Here is the breakdown for a £250,000 mortgage at 4.5% over 25 years (about £1,390/month):

Year Capital repaid Interest paid Balance remaining
Year 1 £5,538 £11,137 £244,462
Year 2 £5,793 £10,882 £238,669
Year 5 £6,628 £10,047 £219,645
Year 15 £10,386 £6,288 £134,080
Year 25 £16,276 £399 £0

Remortgaging: When your initial fixed or tracker deal ends you are moved onto the lender's Standard Variable Rate, which is usually much higher. Most borrowers remortgage to a new deal in the months before that happens. Watch out for early repayment charges (ERCs) if you switch while still inside a fixed period — they are typically 1–5% of the balance, tapering each year.

Tip: Before you commit, budget for the upfront costs as well as the deposit: Stamp Duty Land Tax (England & Northern Ireland; LBTT in Scotland, LTT in Wales), the valuation and arrangement fees, conveyancing and searches. First-time buyers pay no SDLT up to a higher threshold — check the current bands on GOV.UK. For free, impartial guidance see MoneyHelper.

Worked example: £250,000 at 4.5% over 25 years

Amount borrowed £250,000
Term / rate 25 years / 4.50%
Monthly repayment £1,390/month
Total interest paid £166,874
Total to repay £416,874

Frequently asked questions about mortgages

We answer the most common questions about mortgages and home loans

The interest rate is the pure cost the lender charges on the money you borrow, and it is what your monthly repayment is calculated from. The APRC (Annual Percentage Rate of Charge) goes further: it rolls in the product and arrangement fees and the rate you would revert to after the deal ends, expressed as a single yearly figure over the whole term. The APRC is always equal to or higher than the headline rate and is designed to help you compare deals on a like-for-like basis. A mortgage that looks cheaper on the headline rate can work out dearer once a large arrangement fee is taken into account, which is exactly what the APRC reveals.
Most lenders will advance up to 90% of the property value, so you usually need at least a 10% deposit, although some lenders go to 95% for first-time buyers and a handful of guarantor schemes go higher. The size of your deposit sets your loan-to-value (LTV), and the best rates are reserved for lower LTVs — 60%, 75% and 85% are common pricing tiers. On top of the deposit you need to budget for Stamp Duty and buying costs (typically 1–4% of the price). Separately, the amount a lender will offer is capped by an income multiple of around 4.5 times your annual income, then refined by an affordability assessment of your outgoings.
There is no single answer: it depends on your attitude to risk, how long you plan to stay and your view on where the Bank of England base rate is heading. In 2026, with the base rate easing back, tracker deals have become more attractive than they were at the peak. That said, a fixed rate remains the right choice for anyone who values certainty and does not want surprises in their monthly budget — you know exactly what you will pay for the whole deal period, usually 2, 5 or 10 years. If you might move or repay early, check the early repayment charges first. A tracker can win if rates fall, but you carry the risk of them rising. Many borrowers fix for peace of mind and keep the right to overpay.
On top of the purchase price and deposit there are several costs to plan for. The largest is usually Stamp Duty Land Tax (SDLT in England and Northern Ireland; Land and Buildings Transaction Tax in Scotland; Land Transaction Tax in Wales), which is charged in bands above a nil-rate threshold — first-time buyers benefit from relief up to a higher limit. Then come the lender's valuation fee and any arrangement or product fee, conveyancing and local searches (typically £1,000–£2,000), and a survey if you choose one. Removal costs and any chartered surveyor's report are extra. Always check the current SDLT bands on GOV.UK, as the thresholds change from time to time.
Yes. Most deals let you overpay up to 10% of the outstanding balance each year without penalty, either as regular extra payments or a lump sum. When you overpay you can ask the lender to keep the term the same and reduce future payments, or keep the payment the same and shorten the term — financially, shortening the term saves the most interest. Be careful of early repayment charges (ERCs) if you repay or remortgage while still inside a fixed or tracker deal: these are typically 1–5% of the balance and taper down each year. Once your deal ends and you are on the Standard Variable Rate, you can usually repay in full with no ERC.
The Bank of England base rate (also called Bank Rate) is the rate the central bank sets, and it influences the cost of borrowing across the economy. If you are on a tracker mortgage, your rate is the base rate plus a fixed margin agreed with the lender (for example, base rate + 0.75%), so your payment moves up or down whenever the Bank changes the rate. Standard Variable Rates also tend to follow it, though lenders set those at their own discretion. If you are on a fixed rate, base rate moves do not affect you during the deal period — but they shape the rates on offer when you come to remortgage. Fixed-rate pricing is driven more by swap rates, which reflect where markets expect the base rate to go.
There is no legal cap, but lender practice sets the usual maximum at 35 years for most borrowers, with some offering 40 years for younger applicants with strong affordability. The term is also limited by age: lenders generally want the mortgage repaid before you reach 70–75, which restricts the term available the later in life you buy. A longer term lowers the monthly payment but sharply increases the total interest: a £200,000 mortgage at 4.5% pays roughly £165,000 in interest over 30 years, against about £104,000 if repaid over 20 years. Choosing the shortest term you can comfortably afford, then overpaying when you can, is the cheapest route overall.

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