Money Saving Expert Remortgage Deals Calculator

Mortgage Payment Formula:

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

Monthly Payment (PMT):

Unit Converter ▲

Unit Converter ▼

From:	To:

1. What is the Mortgage Payment Calculator?

The Mortgage Payment Calculator helps you estimate your monthly mortgage payments based on the loan principal, interest rate, and loan term. It's particularly useful for comparing different remortgage deals and understanding your financial commitments.

2. How Does the Calculator Work?

The calculator uses the standard mortgage payment formula:

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

Where:

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

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

3. Importance of Mortgage Payment Calculation

Details: Accurate mortgage payment calculation is essential for budgeting, comparing different mortgage offers, understanding the total cost of borrowing, and making informed financial decisions when remortgaging.

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 with the loan term typically between 1-50 years.

5. Frequently Asked Questions (FAQ)

Q1: What factors affect mortgage payments?
A: The three main factors are loan amount, interest rate, and loan term. Higher amounts, rates, or shorter terms increase monthly payments.

Q2: Does this include taxes and insurance?
A: No, this calculation only includes principal and interest. Additional costs like property taxes and insurance are separate.

Q3: How does remortgaging affect payments?
A: Remortgaging to a lower interest rate can reduce monthly payments, while extending the term may also lower payments but increase total interest paid.

Q4: Are there different types of mortgage calculations?
A: Yes, this formula is for fixed-rate mortgages. Adjustable-rate mortgages have different calculation methods that account for rate changes.

Q5: Should I consider early repayment charges?
A: Yes, when remortgaging, always check for early repayment charges on your current mortgage as these can significantly impact the overall cost.