UK mortgage calculator

Want to take out a mortgage in the UK? Our mortgage calculator will show you exactly what monthly instalment you will pay when borrowing a given amount. Use the tool below!

A mortgage calculator is a helpful tool in determining your monthly instalment amount

It is very common for our customers to ask about the amount of the monthly mortgage instalment for a specific commitment amount. Knowing this amount gives some idea of the commitments ahead of them and helps when buying a property. It helps in comparing mortgages, planning expenses and budgeting.

A quick reminder that monthly instalment information is available in the Key Facts / ESIS document (mortgage illustration) however, many of our customers want to see how much they would pay if they borrowed a given amount, how instalments will change if the mortgage is extended or shortened, etc. We completely understand this and although the mortgage instalment formula itself is relatively simple, the calculator will certainly be helpful.

Of course, as brokers, we can calculate the monthly instalment using sophisticated tools. However, we thought it would be useful to provide our readers with a simple UK mortgage calculator that clearly shows what the repayment instalments will look like.

How to use the mortgage calculator?

Let us point out straight away that this simple mortgage calculator is not a perfect tool. It may have difficulties with more complicated mortgages and interest only ones. If you are interested in taking out a mortgage through our company and need precise data, please contact us. Alternatively, you can use a more sophisticated tool on the Government’s Mortgage calculator website.

However, our calculator will work perfectly if you want to quickly determine the instalments of a regular mortgage with capital repayment and a fixed instalment. After entering the amount, click Calculate. The result will immediately appear in the relevant field. This is the amount you will be paying each month.

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How does the UK mortgage calculator calculate your instalment?

The formula for a fixed-rate mortgage is quite simple. It looks as follows:

R=K*(1+(b/12)^n)*(1+(b/12)-1)/[(1+(b/12)^n)-1]

Where:

R – Amount of equal instalment;

K – Amount of mortgage granted

b – Interest rate of the mortgage on an annual basis;

n – Number of instalments.

Although, at first glance, such a formula may appear complicated and complex, the calculations proceed quite quickly. Let us now use an example:

We want to take out a mortgage for £100,000 over a period of 10 years. The interest rate offered by the bank is 7% per annum.

R = 100000 * (1+(0,07/12)^120)*(0,07/12)-1)/[1+(0,07/12)^120)-1]

The calculated instalment is £1161 per month, which agrees with the result presented by our UK mortgage instalment calculator.

Why use a UK mortgage instalment calculator?

The calculator we’ve created doesn’t provide much functionality - you won’t see the amount of the interest portion, nor will you know the potential savings from overpaying on your mortgage. In practice, however, it’s not that important - after all, what matters is how much money you’ll be paying back to the bank after borrowing £100, £150, £200 or £250,000. Our mortgage calculator will provide you with this information, which should be enough to get you started.

If you need an accurate calculation of your commitment, our mortgage calculator is unlikely to work, but in such a situation, the best possible solution is to contact one of our advisors. We will provide you with comprehensive answers to all your questions and very detailed calculations so that you know exactly which financial product you are considering.

How does the interest rate on a mortgage affect the instalment?

Our UK mortgage calculator doesn’t show this, but the amount of your instalment depends on three factors - the value of the money you borrow, the term of your commitment and the interest rate. The more you borrow and the higher the interest rate, the higher the instalment will be. The more years you repay your mortgage, the less you will pay each month.

Remember, however, that by taking out a mortgage at 6% interest per annum, you will have to pay 1/12th of 6% (or 0.5%) on the total commitment in the first month. For example, if you borrow £100,000 at 6%, you will pay £500 back to the bank in the first month in the form of interest alone. However, we are still talking about mortgages with capital repayments, so the remainder of the instalment reduces the value of your commitment. As a result, the next month you will pay, for example, £498 and 30 pence and, although the instalment won’t change, you will be reducing your debt faster and faster.

Does the mortgage calculator provide accurate values?

As generally speaking, yes. Admittedly, our mortgage calculator doesn’t take into account other costs such as the bank’s commission, brokerage costs and compulsory premiums for UK property insurance, which is compulsory with every mortgage, so you won’t use this tool to work out exactly how much you’ll pay back to the bank over 15, 20 or 30 years of repayment.

Keep in mind, however, that the chance of not changing interest rates, remortgaging or overpaying your commitment over the life of your mortgage is virtually zero. For this reason, estimating the total cost of your mortgage misses the point somewhat.

We hope that this simple tool will help you, at least a little, with your calculations and, therefore, with buying a property in the UK. I encourage you to read the other articles on the blog on this topic: Credit in the UK, key information and Buying a flat in the UK step by step.

Of course, as always, we are here to help if you are looking for professional assistance in finding the right mortgage in the UK.