UK Mortgage & Equity Calculator

For a repayment mortgage the calculator uses the standard amortisation formula, which spreads the loan and the interest evenly across every month of the term. Each payment covers the interest accrued that month, and whatever is left reduces the balance. Early on most of the payment is interest; later on most of it goes to the capital.

LTV is the loan as a percentage of the property's value. Borrow £240,000 against a £300,000 home and your LTV is 80%. Lenders price mortgages in LTV bands, and a lower LTV generally opens up lower interest rates — which is why pushing a deposit just past a threshold such as 90%, 85% or 75% can matter more than the extra deposit alone suggests.

On a repayment mortgage each monthly payment reduces the balance, so the debt is cleared by the end of the term. On interest-only you pay just the interest, so the monthly cost is lower but the full amount borrowed is still outstanding at the end of the term and must be repaid another way. The calculator shows both, and for interest-only it makes clear that the capital remains owed.

Equity is the share of the property you own outright — the property's value minus the outstanding mortgage. It grows in two ways: as you pay down the loan, and, if prices rise, as the property gains value. Falling prices work in the opposite direction, and if the mortgage exceeds the value the equity is negative, commonly called negative equity.

Treat it as an illustration, not a forecast. The projection applies whatever annual growth rate you enter, compounded evenly. Real house prices do not move in a straight line — they rise and fall in cycles and vary widely by region and property type. It is worth running the projection with a pessimistic rate as well as an optimistic one.

The calculator covers the mortgage itself. It does not include arrangement or product fees, valuation and legal costs, Stamp Duty, buildings insurance, service charges or ground rent, or ongoing maintenance. It also assumes a single fixed interest rate for the whole term, whereas most UK mortgages are fixed for an initial period and then revert to a different rate.

Only for as long as your initial deal lasts. Most UK mortgages fix the rate for two to five years, after which the loan moves to the lender's standard variable rate unless you remortgage. To see the effect, run the calculator again with a different rate and compare the monthly figures.

By default this calculator assumes overpayments shorten the term — your contractual monthly payment stays the same, and the mortgage is paid off earlier instead. That is how most UK lenders apply a regular overpayment unless you ask them to do it differently. Some lenders can instead recalculate a lower monthly payment over the original term — if you would rather see that effect, contact your lender, since the outcome depends on how they choose to apply it.

Often, yes. Many UK mortgage lenders cap penalty-free overpayments at 10% of the outstanding balance per year during a fixed-rate deal — overpay beyond that and an early repayment charge can apply, typically a percentage of the amount over the limit. This calculator flags it when your monthly and yearly overpayments together would exceed that 10% threshold in the first year, but the real limit is set by your mortgage offer, not by this tool — check your lender's terms before making a large overpayment.