Calculate your monthly loan or mortgage payment with a full amortization breakdown showing total interest and payoff date.
This calculator provides estimates for guidance only. It does not constitute financial advice. Actual payments may vary depending on lender terms, fees, and compounding method.
Understanding your monthly loan payment before you borrow is one of the most important steps in responsible financial planning. Whether you are taking out a mortgage, a personal loan, or car finance, knowing exactly how much you will pay each month helps you budget effectively and compare deals from different lenders. This payment calculator uses the standard amortization formula used by banks and building societies across the UK. It breaks down your loan into monthly payments that cover both interest and principal, showing you the total cost of borrowing over the full term. You can also see how making extra monthly payments can reduce the total interest paid and shorten the loan term, potentially saving thousands of pounds. The calculator works for any fixed-rate amortizing loan, including residential mortgages, buy-to-let mortgages, personal loans, car finance agreements, and student debt. By adjusting the loan amount, interest rate, and term, you can compare different scenarios and find the repayment plan that fits your budget.
To calculate your monthly payment: 1. Enter the loan amount. This is the total amount you plan to borrow. For a mortgage, this is the property price minus your deposit. For a personal loan, this is the amount you are requesting. 2. Enter the annual interest rate (APR). This is the yearly interest rate charged by the lender. You can find this on loan comparison websites or directly from your lender's quote. Enter it as a percentage, for example 5 for 5%. 3. Enter the loan term in years. Mortgages in the UK typically run for 25 years, though terms from 5 to 40 years are available. Personal loans usually run for 1 to 7 years. Car finance is typically 3 to 5 years. 4. Optionally, expand the advanced options and enter an extra monthly payment. This simulates making overpayments on your loan, showing how much interest you could save and how many months earlier you could pay off the loan. 5. Review your results. The monthly payment is the primary figure. The amortization chart shows how the split between principal and interest changes over the life of the loan, with early payments being mostly interest and later payments being mostly principal.
The monthly payment is calculated using the standard amortization formula: Monthly Payment = P x [r(1+r)^n] / [(1+r)^n - 1] Where P = loan principal (amount borrowed), r = monthly interest rate (annual rate / 12 / 100), and n = total number of monthly payments (years x 12). For example, a GBP 200,000 mortgage at 5% APR over 25 years: r = 0.05/12 = 0.004167, n = 300 months. Monthly payment = 200,000 x [0.004167 x (1.004167)^300] / [(1.004167)^300 - 1] = approximately GBP 1,169 per month. Total amount paid = monthly payment x number of payments. Total interest = total amount paid minus the original loan amount. The interest-to-principal ratio shows how much interest you pay relative to the amount borrowed. When extra payments are applied, the calculator iterates month by month, applying the standard payment plus the extra amount. The extra amount goes entirely towards reducing the principal, which means less interest accrues in subsequent months. This compound effect is why even small overpayments can have a significant impact over a long loan term. For 0% interest loans, the monthly payment is simply the loan amount divided by the number of months.
This calculator assumes a fixed interest rate for the entire loan term. In practice, many UK mortgages have an initial fixed period (2, 3, or 5 years) followed by a variable rate. If your mortgage has an initial fixed period, calculate separately for each rate period. Always check with your lender whether early repayment charges apply before making overpayments. Most UK mortgage lenders allow overpayments of up to 10% of the outstanding balance per year without penalty during a fixed-rate period. This calculator does not include arrangement fees, valuation fees, or other charges that may increase the total cost of borrowing.