Mortgage calculator UK

How the payment is calculated in the UK

UK lenders charge interest daily, but lenders’ calculators such as Halifax’s work monthly, at the yearly rate ÷ 12, and so does this one. Halifax’s example, £100,000 at 3.59% over 15 years, comes to £719 a month. With a repayment mortgage the payment clears the loan by the end of the term; with an interest-only mortgage you pay the interest and the whole loan is due at the end. Most loans start with a rate fixed for a set period, and lenders such as Nationwide and Barclays offer terms of up to 40 years.

For equal payments, the calculator uses the annuity formula: payment = loan × i ÷ (1 − (1 + i)^−n), where i is the interest rate for one payment period and n is the number of payments. Each payment first covers that period’s interest, and the rest reduces the balance.

Sources: Halifax mortgage repayment calculator, Nationwide General Mortgage Conditions, Barclays lending criteria, GOV.UK.

Repayment or interest-only

With a repayment mortgage, each monthly payment covers that month’s interest and part of the loan, so the balance reaches zero at the end of the term. With an interest-only mortgage you pay only the interest, the yearly rate ÷ 12 on the loan, and the whole loan is due at the end: on £250,000 at 4.92%, that is £1,025 a month. Barclays offers interest-only terms of up to 25 years.

Fixed periods and the follow-on rate

Most UK mortgages start with a rate fixed for a set period; in 2025 only about 16% of mortgages were on variable rates. When the period ends, the loan moves to the lender’s follow-on rate unless you remortgage. Enter the length of your fixed period to see the balance left when it ends. In July 2026, the Bank of England reported an average two-year fixed rate of 4.92% at 75% loan-to-value and 5.32% at 90%.

Deposit and loan-to-value

UK law sets no minimum deposit. Under the government’s Mortgage Guarantee Scheme, permanent since July 2025, lenders can offer mortgages at 91% to 95% loan-to-value, so a deposit can be as small as 5%. In the second quarter of 2026, 8.4% of new mortgages were above 90% loan-to-value, the highest share since 2008.

Council Tax and leasehold costs

Council Tax depends on your property’s band, not on what you pay for it. In England, bands A to H are based on values on 1 April 1991, and the average Band D bill for 2026-27 is £2,392. Leasehold homes add a service charge and ground rent; for leases granted on or after 30 June 2022, ground rent is usually only a peppercorn.

What goes into the payment

The headline figure is the principal and interest you pay the lender each period. Tick Include running costs to add the property costs you enter: yearly and quarterly amounts are converted to the payment period and added to the total. One-off costs, such as an insurance premium or guarantee fee paid up front, appear in the breakdown but not in the regular payment. Purchase taxes and closing costs are not included.

In the UK they are Council Tax, set by your property’s band, buildings insurance and, for leasehold homes, the service charge and ground rent. Council Tax is usually collected in 10 monthly payments; enter the yearly amount.

How mortgages differ between countries

Most of the 21 countries here apply the yearly rate ÷ 12 to the balance each month. Canada compounds fixed rates twice a year, Belgian law converts the yearly rate to an equivalent monthly rate, Swiss lenders charge simple interest each quarter, Danish mortgage-credit loans follow quarterly bond payments, and some Austrian and Finnish loans count actual days ÷ 360. Lenders in Australia, New Zealand and the UK calculate interest daily.

The equal-payment annuity is standard almost everywhere. Sweden usually repays a fixed share of the original loan each year, so payments fall over time, and Belgium, the Netherlands, Norway, Finland, Iceland and New Zealand also offer equal-principal loans. In Germany you choose the first year’s repayment rate and the loan length follows. Swiss loans only need to be repaid down to two thirds of the property’s value, and Icelandic indexed loans have a balance that rises with inflation.

Monthly payments are the norm. Canada offers six schedules, including accelerated bi-weekly and weekly payments; Australia and New Zealand allow weekly and fortnightly payments; Sweden, Denmark and Italy allow quarterly payments, Italy also half-yearly; and Swiss interest is due each quarter.

In the United States, France, Italy and Spain the rate often lasts for the whole loan. Elsewhere it is usually fixed for a shorter period, such as a term of 5 years or less in Canada or 10 years in the Netherlands, and then reset; the calculator shows the balance when that period ends.

Mortgage insurance paid by the borrower is rare outside North America and Australia. US lenders may require monthly PMI with less than 20% down; Canadian and Australian buyers with a smaller deposit pay a one-off premium; New Zealand banks add a margin to the rate; the Dutch NHG and the Finnish state guarantee charge a one-off fee; and Danish mortgage-credit loans carry an ongoing contribution fee.

Outside the United States, property tax is never a percentage of the purchase price. It depends on a band, an assessed or cadastral value or a local rate, so the calculator asks for the yearly amount in every country.

Frequently asked questions