TL;DR
In short
- A repayment mortgage payment is worked out with the standard equal-payment formula. It depends on the loan amount, the interest rate and the number of payments.
- On a £225,000 loan over 25 years at an illustrative 4.5%, the payment is about £1,251 a month and total interest about £150,000. This is an illustration, not a current offer.
- Stretching the term from 25 to 35 years cuts the payment to about £1,065 but adds about £72,000 of interest.
- A rate 1 percentage point higher (5.5% instead of 4.5%) adds about £131 a month.
- A payment that fits your budget does not mean a lender will approve the loan. Lenders assess affordability separately, and the payment can change when a fixed rate ends.
A mortgage calculator gives you a monthly payment in seconds. The harder question is what that number means for you: whether a longer term is worth it, what each extra percentage point costs and what happens when your fixed rate ends.
You can work out your own figure with our mortgage calculator. This guide helps you interpret the result through worked examples. It is general information, not personal mortgage advice.
How do you calculate a mortgage payment?
A repayment mortgage payment is calculated with the standard formula for equal monthly capital-and-interest payments at an unchanged rate. In two short steps:
q = (1 + r)^n
M = (P × r × q) ÷ (q − 1)
Where:
- M is the monthly payment;
- P is the amount borrowed: the property price minus your deposit;
- r is the monthly interest rate as a decimal: the annual rate divided by 100, then by 12;
- n is the number of monthly payments: the term in years multiplied by 12;
- q is the intermediate value from the first line. The
^symbol means “raised to the power of”.
This guide uses one base example throughout: a £250,000 property, a £25,000 (10%) deposit and a £225,000 mortgage over 25 years at 4.5%. That gives r = 4.5 / 100 / 12 = 0.00375 and n = 300, so the payment is about £1,250.62 a month. The 4.5% is an assumption for the calculation, not a current lender rate.
In the first month, interest is £225,000 × 0.045 / 12 = £843.75, and the remaining £407 or so reduces the balance. With each payment the interest part falls and the capital part grows, even though the payment stays the same.
What does the calculator result tell you?
The calculator shows five figures, and each answers a different question. The most common mistake is to look only at the monthly payment.
| Result | What it tells you | What to watch |
|---|---|---|
| Monthly payment | What you pay each month at the assumed rate | Only holds while that rate applies |
| Mortgage amount | What you borrow: price minus deposit | Fees added to the loan increase it |
| LTV | The share of the property value funded by the loan | LTV affects which products may be available |
| Total repayments | Capital plus interest over the full term | Excludes your deposit and buying costs |
| Total interest | The cost of borrowing the money | Rises with a longer term and a higher rate |
In the base example, LTV is 90%, total repayments are about £375,187 and total interest is about £150,187. Read more about why LTV matters when choosing a product in What is the LTV ratio of a mortgage?.
25, 30 or 35 years: how does the term change the payment and cost?
A longer term lowers the payment but, at the same rate, adds significantly to total interest. For a £225,000 mortgage at 4.5%:
| Term | Monthly payment | Total interest |
|---|---|---|
| 25 years | about £1,251 | about £150,187 |
| 30 years | about £1,140 | about £185,415 |
| 35 years | about £1,065 | about £222,228 |
Moving from 25 to 35 years cuts the payment by about £186 a month but costs about £72,000 more in interest if the rate does not change and you do not overpay. A longer term can make sense if the lower payment gives you a safer buffer. Many mortgages also allow limited overpayments without an early repayment charge, so some borrowers choose a longer term and overpay when they can. Overpayment limits depend on the product, and you can estimate the effect with our overpayment calculator.
The term available also depends on your age and the lender’s criteria. Not every borrower can get 35 years.
What happens to the payment if the rate rises?
On a £225,000 mortgage over 25 years, each extra percentage point adds more than £130 a month.
| Interest rate | Monthly payment | Total interest (25 years) |
|---|---|---|
| 4.5% | about £1,251 | about £150,187 |
| 5.5% | about £1,382 | about £189,509 |
| 6.5% | about £1,519 | about £230,765 |
It is worth testing a rate 1–2 points higher than today’s as well as your starting assumption. If that payment still fits your budget, you have more room when your fixed rate ends. We explain the difference between fixed, tracker and SVR rates in Mortgage interest: key information.
A bigger deposit: how much lower is the payment?
A 15% deposit instead of 10% cuts the payment in the example by about £69 a month and total interest by about £8,300.
On a £250,000 property, a £37,500 deposit means a £212,500 mortgage at 85% LTV. At 4.5% over 25 years the payment is about £1,181 and total interest about £141,843. In practice the effect can be bigger, because different rates may be available at lower LTV. That is not guaranteed: rates depend on the lender, the product and your circumstances.
Before putting all your savings into the deposit, keep money aside for stamp duty, legal fees, a survey, moving costs and an emergency buffer. See our buying costs guide for the full list.
What happens to the payment when a fixed rate ends?
The calculator assumes one rate for the whole term, but a fixed rate usually only covers the first few years.
In the base example, about £197,680 is still owed after 5 years. If you move to a new rate for the remaining 20 years, the payment would be about:
| New rate after 5 years | Payment for the remaining 20 years |
|---|---|
| 4.5% (unchanged) | about £1,251 |
| 5.5% | about £1,360 |
| 6.0% | about £1,416 |
This is a simplification: it ignores fees and the products that will be available in 5 years. It still shows why it pays to check the payment at a higher rate. Our 6-month plan for the end of a fixed rate explains how to prepare, and our remortgage page covers your options.
Monthly payment vs affordability: what is the difference?
The calculator result is arithmetic; affordability is the lender’s decision. It helps to separate three levels:
- The payment: what you repay at a given loan amount, rate and term.
- Your budget: whether, after the mortgage, bills, travel, childcare and other commitments, you still have a buffer for the unexpected.
- The lender’s affordability assessment: verified income, spending, credit commitments, credit history and the property. Where FCA rules require it, lenders also consider the effect of possible future rate rises. The rules include exceptions, so the same test does not apply to every application.
So you might comfortably afford a payment and still be offered a lower loan, for example because of other commitments or the type of income you have. We explain this in What is affordability? and What is a mortgage stress test?. For an indication of the amount, see How much can I borrow?.
Common mistakes when reading the result
Most misunderstandings come from treating the calculator result as a promise rather than a scenario.
- Treating the calculator rate as a current offer. The default rate is an example. Actual rates depend on the market, LTV, the product and your circumstances.
- Assuming the payment stays the same for 25 years. When a fixed rate ends, the payment can go up or down.
- Ignoring fees added to the loan. Adding a £999 product fee to a £225,000 mortgage at an unchanged 4.5% over 25 years raises the payment by about £5.55. The extra repayments total about £1,666, including about £667 of interest on the fee. The totals use the unrounded payment.
- Confusing total repayments with the cost of buying. Total repayments exclude your deposit, stamp duty, legal fees, valuation and insurance.
- Comparing only the monthly payment. Two mortgages with similar payments can have different fees, terms and total costs. Compare a specific offer using its ESIS (mortgage illustration).
- Forgetting the first payment. The first payment can be higher because the lender adds interest for the days between completion and your regular payment date.
How we can help
If the calculator result looks manageable, the next step is to check which products are actually available for your situation. An Extend Finance adviser can compare options from across the market, taking into account your income, deposit, preferred term and future plans. Any applicable mortgage advice fee is disclosed to you before you decide to proceed. You can book a free, no-obligation consultation.
Summary
The monthly payment is only the starting point. Before you commit, test a few scenarios in the mortgage calculator: a longer and shorter term, a higher rate and a bigger deposit. Compare them with your real budget, not just today’s rate. If you want to turn the result into real options, book a free, no-obligation consultation.
FAQ
Frequently asked questions
How do you calculate a mortgage payment?
A repayment mortgage payment uses the formula M = P × r × (1 + r)^n / ((1 + r)^n − 1), where P is the loan, r the monthly rate as a decimal and n the number of payments. For £225,000 over 25 years at an illustrative 4.5%, the payment is about £1,250.62 a month. The quickest way to check your own figure is our mortgage calculator.
Is a 25-year or 35-year mortgage better?
It depends on your budget. In the £225,000 example at 4.5%, a 35-year term lowers the payment from about £1,251 to about £1,065 but adds about £72,000 of interest. A longer term gives more room in your budget; a shorter one costs less overall. The term available also depends on your age and the lender’s criteria.
How much does a 1 percentage point rate rise add to a mortgage payment?
On a £225,000 mortgage over 25 years, a rise from 4.5% to 5.5% increases the payment from about £1,251 to about £1,382, or about £131 a month. On a bigger loan the difference is larger, which is why it is worth checking the payment at a higher rate than today’s.
Does the calculator result mean I will get a mortgage?
No. The calculator works out a payment for the assumptions you choose. A lender separately assesses your income, spending, commitments, credit history and the property and, where FCA rules require it, the effect of possible rate rises. The rules include exceptions. Being able to afford the payment does not guarantee approval.
Why are total repayments not the full cost of buying?
Total repayments are the loan capital plus interest over the full term at an unchanged rate. They exclude your deposit, stamp duty, legal fees, valuation, insurance and any rate change after a fixed deal ends.
