Mortgage Calculator UK

Mortgage Payment Formula:

\[ Payment = P \times r \times \frac{(1 + r)^n}{(1 + r)^n - 1} \]

Monthly Payment:

Total Payment:

Total Interest:

Unit Converter ▲

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1. What is a Mortgage Calculator?

A mortgage calculator helps you estimate your monthly payments and total costs for a mortgage loan based on the principal amount, interest rate, and loan term.

2. How Does the Calculator Work?

The calculator uses the standard mortgage payment formula:

\[ Payment = P \times r \times \frac{(1 + r)^n}{(1 + r)^n - 1} \]

Where:

\( P \) — Principal loan amount (£)
\( r \) — Monthly interest rate (annual rate ÷ 12)
\( n \) — Total number of payments (loan term in years × 12)

Explanation: This formula calculates the fixed monthly payment required to fully repay a mortgage over its term, including both principal and interest.

3. Importance of Mortgage Calculation

Details: Understanding your mortgage payments helps with budgeting, comparing loan options, and planning your finances when buying a property.

4. Using the Calculator

Tips: Enter the loan amount in £, annual interest rate in %, and loan term in years. All values must be positive numbers.

5. Frequently Asked Questions (FAQ)

Q1: What's included in the monthly payment?
A: This calculates principal and interest. Your actual payment may include taxes, insurance, and fees.

Q2: How does loan term affect payments?
A: Shorter terms mean higher monthly payments but less total interest paid. Longer terms reduce monthly payments but increase total interest.

Q3: What's a typical mortgage term in the UK?
A: Most UK mortgages are 25-30 years, but terms can range from 5-40 years depending on lender and borrower circumstances.

Q4: How often are interest rates compounded?
A: UK mortgages typically use monthly compounding, which this calculator assumes.

Q5: Are there other mortgage types?
A: This calculator is for repayment mortgages. Interest-only mortgages would have different calculations.