How much does a 1% rate increase cost on a mortgage?

On a GBP 250,000 mortgage over 25 years, a 1% rate increase (from 4% to 5%) adds roughly GBP 147 per month, or about GBP 44,000 over the full term. The impact varies based on your mortgage size and remaining term.

Should I fix my mortgage rate or stay on a tracker?

Fixed rates give payment certainty, while trackers follow the Bank of England base rate. If you believe rates will rise, fixing protects your payments. If rates are likely to fall, a tracker lets you benefit from reductions. This calculator helps you compare the cost at different rates.

How does the Bank of England base rate affect my mortgage?

If you have a tracker mortgage, your rate moves directly with the base rate. Variable rate mortgages may also change when the base rate moves, though lenders set their own timing. Fixed rate mortgages are unaffected until the deal period ends.

Mortgage Interest Rate Calculator

Compare how different interest rates affect your monthly payment and total mortgage cost.

Updated for 2026/27 tax year

Published by UltraCalculatorsLast reviewed: 28 Mar 2026v1.0Sources:Bank of England base rate MoneyHelper rate guidanceEditorial PolicyEstimates only. Always consult a qualified professional.Report an issue

This calculator provides estimates for guidance only. It does not constitute financial advice. Actual mortgage payments depend on your specific deal and lender terms. Always consult a qualified mortgage adviser before making financial decisions.

Even a small change in mortgage interest rates can have a dramatic effect on your monthly payments and the total cost of your home loan. When the Bank of England adjusts the base rate, millions of UK homeowners on tracker and variable rate mortgages see their payments change accordingly. Those coming to the end of a fixed-rate deal may face a very different rate environment than when they originally borrowed. This calculator lets you compare two interest rates side by side, showing the monthly payment at each rate, the difference in monthly cost, and the total cost over the remaining term. It also generates a chart showing how monthly payments change across 0.25% increments between the two rates, making it easy to visualise the impact of gradual rate movements. Whether you are assessing the effect of a Bank of England base rate change, comparing fixed-rate deals, or evaluating whether to remortgage, this tool gives you the numbers to make an informed decision.

How to Use This Calculator

To compare mortgage interest rates: 1. Enter your mortgage amount. This is the outstanding balance on your mortgage, not the original property price. 2. Enter your current interest rate. This is the annual rate you are currently paying. 3. Enter the new interest rate you want to compare. This could be a rate you have been offered, or a hypothetical rate to understand the impact of changes. 4. Set the remaining mortgage term using the slider. This is the number of years left on your mortgage, not the original term. 5. Review the results. The calculator shows the monthly payment at both rates, the monthly and total cost difference, and a chart plotting monthly payments at each 0.25% increment between the two rates. A positive difference means the new rate costs more; a negative difference means you would save money.

How It Works

The monthly payment for a repayment mortgage at any given rate is calculated using the standard annuity formula: M = P x [r(1+r)^n] / [(1+r)^n - 1] Where M is the monthly payment, P is the principal (mortgage balance), r is the monthly interest rate (annual rate divided by 12, divided by 100), and n is the total number of monthly payments. The monthly difference is simply the payment at the new rate minus the payment at the current rate. The total difference is the monthly difference multiplied by the total number of payments. The chart plots the monthly payment for each 0.25% increment between the two rates. For example, if you enter 4% and 6%, the chart shows payments at 4.00%, 4.25%, 4.50%, 4.75%, 5.00%, 5.25%, 5.50%, 5.75%, and 6.00%. This helps you understand the incremental impact of rate changes rather than just the two endpoints.

Worked Examples

Example 1: Rate rise from 4% to 6% on GBP 250,000

Inputs: Mortgage amount: GBP 250,000, Current rate: 4%, New rate: 6%, Remaining term: 25 years

Monthly payment at 4%: r = 0.04/12 = 0.003333, n = 300
(1.003333)^300 = 2.7148
M = 250,000 x 0.003333 x 2.7148 / (2.7148 - 1) = 250,000 x 0.009049 / 1.7148
M at 4% = GBP 1,319.78
Monthly payment at 6%: r = 0.06/12 = 0.005, n = 300
(1.005)^300 = 4.4650
M = 250,000 x 0.005 x 4.4650 / (4.4650 - 1)
M at 6% = GBP 1,610.75
Monthly difference: GBP 1,610.75 - GBP 1,319.78 = GBP 290.97
Total difference: GBP 290.97 x 300 = GBP 87,291

Result: A 2% rate rise adds approximately GBP 291 per month, costing an extra GBP 87,291 over the full 25-year term.

Example 2: Small rate change from 4.5% to 4.75%

Inputs: Mortgage amount: GBP 250,000, Current rate: 4.5%, New rate: 4.75%, Remaining term: 25 years

Monthly payment at 4.5%: approximately GBP 1,389.58
Monthly payment at 4.75%: approximately GBP 1,424.84
Monthly difference: GBP 1,424.84 - GBP 1,389.58 = GBP 35.26
Total difference: GBP 35.26 x 300 = GBP 10,578

Result: Even a 0.25% rate increase adds roughly GBP 35 per month, totalling over GBP 10,500 across the full term.

This calculator assumes a fixed rate for the entire remaining term at both the current and new rates. In reality, most UK mortgage deals have an initial fixed or tracker period, after which the rate changes. The comparison is most useful when evaluating a fixed-rate remortgage offer against your current rate. The calculator does not include early repayment charges, arrangement fees, or other costs associated with switching deals. When comparing remortgage offers, factor in any fees to get the true cost of switching. Some lenders offer fee-free deals at slightly higher rates, which may still work out cheaper overall. If your mortgage has less than 2 years remaining, the savings from switching may not justify the fees involved. Use this calculator alongside a remortgage calculator for a complete picture.