Mortgage Calculator

Mortgage Guide

Repayment vs Interest Only

A repayment mortgage reduces your loan balance every month — by the end of the term, you own the property outright. An interest-only mortgage keeps payments lower but you still owe the full loan at the end and need a separate plan to repay it. Interest-only mortgages are now rare for residential buyers and typically reserved for buy-to-let investors.

Why Your LTV Ratio Matters

LTV (Loan to Value) = mortgage amount ÷ property value × 100. The lower your LTV, the better the mortgage rate you can access. Key thresholds: 95% (minimum deposit most lenders accept), 90%, 85%, 80%, 75%, and 60%. Crossing below 75% and especially 60% LTV typically unlocks the best rates. Each 5% improvement in LTV can save 0.2–0.5% on your interest rate — worth calculating over a 25-year term.

The Power of Overpayments

Most UK mortgage products allow overpayments of up to 10% of the outstanding balance per year without penalty. Even £100/month extra on a £270,000 mortgage at 4.5% over 25 years saves approximately £18,000 in interest and shortens the term by 2–3 years. The earlier in the mortgage term you overpay, the greater the compounding benefit.

Fixed vs Variable Rates

Fixed rate: your payment stays the same regardless of Bank of England base rate changes — ideal for budgeting certainty. Tracker: moves with the base rate — lower when rates fall, higher when they rise. Discount: a set amount below the lender's standard variable rate (SVR). Most buyers choose a 2–5 year fixed rate then remortgage when the deal expires.