Repayment and interest-only are treated differently.

Repayment uses monthly amortisation. Interest-only models the monthly interest payment while keeping the principal outstanding at the end of the term.

Overpayments are modelled as extra monthly principal reduction on repayment mortgages.

UNDERSTANDING THE MORTGAGE MODEL

A mortgage has both a monthly cost and a long-term cost.

The same borrowing amount can produce different outcomes depending on the rate and term. A longer term generally spreads repayment over more months, while a higher rate increases the interest charged on the outstanding balance.

Repayment

Each payment covers interest and reduces the principal. The balance normally falls over time, so the interest part of later payments can become smaller.

Interest-only

The model shows the interest payment while the original principal remains due at the end. A real interest-only mortgage requires a separate repayment plan.

LTV

Loan-to-value compares the mortgage with the property value. Changing the deposit changes the starting LTV and the amount borrowed.

Worked example

A £270,000 repayment mortgage at 5% over 25 years is roughly £1,580 a month under a standard monthly-amortisation model. That number does not include the full cost of owning a property, such as insurance, maintenance, service charges or taxes where applicable.

MoneyHelper explains that mortgage affordability can involve household income, regular spending and existing debts, and its mortgage calculator describes results as estimates rather than lender quotations. Mortgage affordability guidance → · Mortgage repayment guidance →

REVIEWED SEPTEMBER 2026

Check the rate, term and cash buffer separately.

A mortgage payment is only one part of the property budget. Before relying on a scenario, check the purchase costs, ongoing household spending, insurance and a realistic reserve for repairs or income changes. Also compare the calculator's fixed-rate assumption with the actual product illustration supplied by a lender.

Overpayments are shown as a mathematical scenario. Your lender's annual limits, early repayment charges and the way overpayments are applied can change the real-world result.

A lower monthly payment is not automatically a lower-cost mortgage.

The two main levers in this calculator are the interest rate and the term. A longer term can reduce the monthly repayment, but it can also increase the total amount of interest paid because the balance remains outstanding for more months.

Deposit and LTV

Loan-to-value is the mortgage balance compared with the property's value. A larger deposit lowers the amount borrowed and therefore lowers the starting LTV in this simplified model.

Rate and term

The rate affects the interest charged each month. The term controls how many monthly payments spread the borrowing across time. Test both rather than looking at the payment alone.

Overpayments

An extra payment can reduce principal sooner on a repayment mortgage. The result shown is a modelled scenario; actual products can have overpayment limits or conditions.

Example: a £300,000 property with a £30,000 deposit starts with a £270,000 mortgage and a 90% LTV. Changing the term or rate can materially change the monthly payment and lifetime interest even though the property price and deposit remain the same.

The mortgage is not the whole property budget.

Buying a home can involve costs outside the mortgage payment, including legal work, surveys, moving expenses, insurance, maintenance and taxes. The calculator includes an illustrative SDLT figure for the simple scenarios represented by the inputs, but it does not know every transaction-specific relief or cost.

For household affordability, compare the mortgage with take-home income and the rest of your regular budget. A lender's maximum borrowing figure is not the same thing as a comfortable household budget.

Think in scenarios

Run the result at your quoted rate, then test a higher rate, a larger deposit or a different term. The change between scenarios can be useful when building a buffer for future rate or cost changes.

Mortgage calculator FAQs

Does this calculator show what a bank will lend me?

No. Lenders use their own affordability, underwriting, income and credit criteria. WorthChex models the repayment mathematics for the assumptions you enter.

What does LTV mean?

LTV means loan-to-value: the amount borrowed compared with the property's value. A £270,000 mortgage on a £300,000 property is a 90% LTV scenario.

Is an interest-only mortgage cheaper?

The monthly interest payment can be lower than a repayment mortgage under the same rate and balance, but the principal remains outstanding under the simplified model. The repayment of the capital needs a separate plan.

Are overpayments always allowed?

No. Mortgage contracts can set annual overpayment limits, fees or other conditions. Check the actual product documentation before relying on an overpayment scenario.