Mortgage Calculator

Mortgages and Repayments

Before you look for property to invest in, it’s important to know what your mortgage repayments will be each month as well as over the full term of the loan. Our mortgage repayment calculator lets you estimate your monthly mortgage payment based on different property prices, deposits, and interest rates.

Types of Mortgages

There are several different types of mortgage options depending on whether you are looking at a commercial or residential property, and how you intend to use the property. The type of mortgage you choose will affect your rates, deposit requirements and associated fees.

Residential mortgages:

These are standard mortgages that can be used for a new home you want to occupy, or mortgaging your current home. Interest rates and fees can differ between lenders, and you have the option of fixed-rate and variable interest rate loans.

Buy to let mortgages:

 This option is for people who want to buy an investment property and rent it out to tenants.  Buy to let mortgages can be arranged on either, a capital and interest (repayment) or an interest-only basis. This financing usually carries higher fees and interest rates than standard residential mortgages.

Commercial mortgages:

 A commercial mortgage allows a business to purchase a property, either for trading purposes or to rent out to other businesses. They may have a fairly high deposit requirement and interest rate (depending on the borrowers circumstances), although they are more competitive than unsecured business loans.

Property development financing:

This financing option is used when a property needs to be built or refurbished. Funds may be released in a lump sum for smaller projects or at stages for larger projects and can cover anything from £25k to over £25 million.

Bridging and short-term finance:

These loans allow people and businesses to raise financing quickly to secure a property. They are also used to refurbish properties, buy property at auction, raising a deposit, or bridging a shortfall between selling and purchasing a property. This is more expensive than long-term lending but can be granted and utilised in days rather than weeks.

How are Mortgage Repayments Calculated?

Monthly mortgage payments are calculated using the following factors:

The principal

This is the total amount that you borrow from the lender.

The interest 

Rates can be fixed or variable, and in some cases can be impacted by your credit rating or investor risk profile. The higher the interest rate, the higher your repayments will be.

The term 

This is the period of time you will take to repay the loan and interest to the lender. Typically, residential loans are 25 years while commercial loans can be 3-25 years. Many lenders give you an option to increase or decrease your term. The faster you pay off your mortgage, the less interest you pay over the total period – although you may have to pay early repayment fees depending on your contract.

Repayment type 

Mortgages can be capital repayment loans where you pay back the interest and the principal you borrowed from the lender, or interest-only, where you only pay the interest for the term of the loan and settle the principle when the term ends.

Budgeting Guide for Mortgage Repayments

When budgeting for your mortgage repayments, it is recommended that you include the following:

• The monthly repayment amount determined by the mortgage repayment calculator
• Additional costs incurred by the mortgage (fees and taxes)
• Monthly homeowner’s insurance estimates
• Fixed expenses such as debt payments (cars, mobile phones, credit cards, etc.), childcare, memberships and services
• Monthly discretionary spending such as groceries, travel, clothing, entertainment, etc.

 Balance this total against your net monthly income.

 Be sure to also consider additional costs that are likely to occur during the term of your mortgage, such as:

• Home repairs or upgrades
• Heating and utilities
• Transportation expenses

 When determining your budget, try to leave space where you can save for emergency situations, having a family, starting a business, or other necessities. If your repayments are affected by interest rate increases, you need to be sure that you’ll be comfortable with the additional cost. 

How to Use the Mortgage Repayment Calculator

Our mortgage repayment calculator is very simple to use! All you need to do is input your loan amount, the term of the loan, the interest rate, and the repayment type. The calculator will automatically determine your repayments.

It’s a good idea to play around with the numbers and see how reducing the term or loan amount can change your monthly repayments, so you get a clear idea of what you should prioritise when determining your deposit or finding a mortgage. Also, remember that some mortgages have fixed interest rates and others have variable interest rates, so be sure to change the interest rate up and down to see how your repayments may be affected.