Property & Mortgages
Enter your property price, deposit, and interest rate to see your monthly repayments, total interest, and full amortisation schedule.
80% LTV · 20% equity
Repayment type
Monthly payment
£1,334.00
Capital & interest over 25 years
| Year | Opening balance | Interest | Capital | Closing balance |
|---|---|---|---|---|
| 1 | £240,000 | £10,691 | £5,317 | £234,683 |
| 2 | £234,683 | £10,447 | £5,561 | £229,122 |
| 3 | £229,122 | £10,192 | £5,816 | £223,306 |
| 4 | £223,306 | £9,924 | £6,084 | £217,222 |
| 5 | £217,222 | £9,645 | £6,363 | £210,859 |
Mortgage Guide
A mortgage is a loan secured against a property. The lender charges interest on the outstanding balance, and your monthly payment depends on the loan size, the interest rate, the term, and whether you are repaying the capital or paying interest only.
For a repayment mortgage, each monthly payment covers the interest charged on the current balance plus a portion of the capital. Early in the term, most of the payment is interest and very little reduces the balance. Over time, as the balance falls, the interest portion shrinks and the capital portion grows. This is called amortisation, and the year-by-year table above shows exactly how it plays out.
LTV is the size of your mortgage as a percentage of the property value. The lower your LTV, the less risk the lender takes on, and the lower the interest rate they will typically offer. Most lenders reserve their best rates for borrowers at 60% LTV or below, with incremental pricing tiers at 75%, 80%, 85%, and 90%. Borrowing above 90% LTV usually comes with a significant rate premium and may require additional protection.
With a repayment mortgage, your monthly payment covers both interest and capital. The balance reaches zero at the end of the term and you own the property outright. With an interest-only mortgage, your monthly payment covers only the interest; the full capital balance remains at the end and must be repaid separately. Interest-only has lower monthly outgoings but costs far more overall and requires a credible repayment plan. Most UK residential lenders now require evidence of a repayment vehicle before offering interest-only products.
The mortgage term directly controls your monthly payment. A longer term means lower monthly payments but far higher total interest. Extending from 25 to 35 years on a £240,000 mortgage at 4.5% saves around £220 per month but costs roughly £75,000 more in interest. Many borrowers choose a longer term for initial affordability, then overpay or remortgage to a shorter term as circumstances allow.
Regular overpayments are one of the most powerful ways to reduce both the term and the total interest paid. Because mortgage interest compounds daily or monthly on the outstanding balance, anything that reduces the balance sooner saves a disproportionate amount of future interest. Even £100 per month extra on a £200,000 mortgage can save several years and tens of thousands in interest. Use the Mortgage Overpayment Calculator to model your specific scenario.