Money Saving Expert Mortgage Calculator UK

Mortgage Payment Formula:

\[ PMT = P \times \frac{r}{12} \times \frac{(1 + \frac{r}{12})^{12 \times t}}{(1 + \frac{r}{12})^{12 \times t} - 1} \]

Monthly Payment (PMT):

Unit Converter ▲

Unit Converter ▼

From:	To:

1. What is the Mortgage Payment Calculator?

The Money Saving Expert Mortgage Calculator estimates your monthly mortgage payments based on the loan amount, interest rate, and loan term. It uses the standard UK mortgage formula to provide accurate payment calculations.

2. How Does the Calculator Work?

The calculator uses the mortgage payment formula:

\[ PMT = P \times \frac{r}{12} \times \frac{(1 + \frac{r}{12})^{12 \times t}}{(1 + \frac{r}{12})^{12 \times t} - 1} \]

Where:

\( PMT \) — Monthly payment (GBP)
\( P \) — Loan principal (GBP)
\( r \) — Annual interest rate (decimal)
\( t \) — Loan term in years

Explanation: The formula calculates the fixed monthly payment required to fully amortize a loan over the specified term, accounting for compound interest.

3. Importance of Mortgage Calculation

Details: Accurate mortgage calculation helps borrowers understand their financial commitments, compare different loan options, and budget effectively for home ownership.

4. Using the Calculator

Tips: Enter the loan amount in GBP, annual interest rate as a percentage, and loan term in years. All values must be positive numbers.

5. Frequently Asked Questions (FAQ)

Q1: What is included in the monthly payment?
A: This calculation includes principal and interest only. Additional costs like insurance, taxes, and fees are not included.

Q2: How does interest rate affect payments?
A: Higher interest rates significantly increase monthly payments. Even a small rate change can make a substantial difference over the loan term.

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

Q4: Can I make overpayments on my mortgage?
A: Many UK mortgages allow overpayments up to a certain limit each year without penalty, which can reduce the overall interest paid.

Q5: What are the current average mortgage rates?
A: Mortgage rates vary by lender, loan type, and market conditions. Check with multiple lenders for current rates and the best deals.