Mortgage calculator
Monthly payment, total interest and the cash you need upfront to buy a home.
Calculator inputs
Results
Enter your values and press “Calculate” to see the result.
In short
- What it calculates
- Monthly payment, total interest and the cash you need upfront to buy a home.
- Formula used
Amount financed = price − down payment- Example
- £200,000 home, £40,000 down, 3.2% over 25 years, £35 insurance and 8% costs:
Mortgage calculator
A mortgage is more than the loan payment: there are linked insurance policies and, above all, upfront costs that many buyers forget.
This calculator adds them all up so you can see the cash you really need.
How it works
The amount financed is the price minus the down payment. The constant-payment formula is applied to it using the monthly rate, then insurance is added.
Purchase costs are computed as a percentage of the price and added to the down payment to give the upfront cash.
Formula
Amount financed = price − down payment
Loan payment = P × i × (1+i)ⁿ / [(1+i)ⁿ − 1]
Total payment = loan payment + insurance
Upfront cash = down payment + price × cost %
Worked example
£200,000 home, £40,000 down, 3.2% over 25 years, £35 insurance and 8% costs:
Total payment: £811.71
Financed: £160,000 (80%)
Interest: £72,812
Cash needed upfront: £56,000
Explanation
The monthly payment is not what to look at
Stretching the term lowers the instalment and inflates total cost. A thirty-year mortgage has comfortable payments and can end up costing twice the interest of the same amount over twenty. Before signing, look at the total paid over the life of the loan, not just what leaves your account each month.
Purchase costs are not small
Beyond the deposit there are transfer taxes, notary, registry, conveyancing and valuation fees. Depending on the country and property type they can amount to eight to fifteen per cent of the price, and they are not financed: you need them saved separately from the deposit.
Fixed or variable
A fixed rate gives certainty and usually starts higher. A variable one starts lower but its instalment is reviewed periodically against a reference index, and a two point rise on a long loan changes the monthly payment substantially. The choice depends more on your tolerance for that uncertainty than on which looks better on paper.
The thirty per cent rule
It is commonly recommended that the payment should not exceed around a third of net household income. It is a prudence guideline rather than a legal rule, and it is worth calculating against the highest rate scenario you can imagine, not the current one.
Frequently asked questions
What cost percentage should I enter?
It depends on your country and whether the property is new. As a guide, 5% to 12% of the price covers taxes and fees in many markets.
Is the rate fixed or variable?
The calculation assumes a fixed rate. With a variable mortgage the payment changes at each review, so treat it as a snapshot of current conditions.
How much of my income should the payment take?
The usual guidance is to stay below 30–35% of household net income.
How much do I need saved beyond the deposit?
Purchase costs run to between eight and fifteen per cent of the price depending on the country, and they are not normally financed.
How much of my income should the payment be?
Around a third of net household income is the usual guideline, and it is worth calculating it against an unfavourable rate scenario.
Need to calculate something else?
These tools are often used alongside this calculator.
Loan
Monthly payment, total interest, APR with fees and insurance, and how principal and interest split each year.
Amortisation
Payment by payment: interest and principal, and how much you save and how many months you cut by overpaying…
Monthly payment
Instalment amount when the term is quoted directly in months.
Savings
How much you will accumulate by saving a fixed amount every month for several years.
Inflation
What your money will be worth in a few years at a given inflation rate.
Compound interest
How much your money grows with regular contributions, and what it is really worth once inflation and fees…