One of the most common (and sensible) questions we get asked is How much will my mortgage cost?
It’s a good question, because your mortgage is probably going to be your biggest outgoing each month. So it’s important to know that what you want to do is affordable both now and in the future.
Our mortgage cost calculator is quick and easy to use so you can find out the likely cost of your mortgage in seconds.
Published 03 August 2022
The cost of your mortgage depends on several factors, including how much you’re borrowing, your mortgage term, and the rate of interest you’re paying. If your mortgage is a repayment mortgage you’ll make monthly mortgage repayments which cover both the capital you borrowed and the interest due. If it’s interest only you’ll just be paying the interest rather than reducing the amount you owe. You can find out more about this in our repayment vs interest only guide and use our interest only mortgage repayment calculator to find out how much you can expect to pay.
On a repayment mortgage the longer the mortgage term you choose the cheaper your monthly payments will be, but you’ll end up paying back more overall. If you choose a shorter term, your monthly payments might be higher, but you’ll reduce the total amount of interest you need to pay back, as you’ll be paying off the loan more quickly.
If you’re not sure which mortgage deal is likely to be most cost-effective for you based on your individual circumstances, our expert advisers can run you through the available options to make sure you’re getting the best deal possible.
Once you’ve got an idea of how you’d like to repay your mortgage and how much you can borrow you can get started and calculate mortgage repayments based on the amount you need. To work out exactly how much you’ll pay every month, you’ll need to know how much you want to borrow, over how many years, and what interest rate you’ll be paying.
You can then enter these figures into our mortgage repayment calculator, then it’ll crunch the numbers and tell you how much your mortgage repayments might be every month, as well as the total amount you’ll pay over the term. You’ll also see exactly how much interest you’ll pay overall, and when you use our mortgage repayment calculator, overpayments can also be added to see how this can help bring the total amount you’ll pay down.
Remember that you’re unlikely to pay the same interest rate throughout your mortgage term though, as most deals only last for a few years. If you don’t remortgage to another deal after your initial deal ends, you’ll default to your lender’s standard variable rate which is likely to result in higher monthly payments.
The exact amount of interest you’ll pay depends on the mortgage rate you’re on. This can change over time. For example, you might be on a low mortgage rate at the moment, but if interest rates rise during this period, you could end up paying a higher mortgage interest rate when you come to remortgage, or if you move onto your lender’s standard variable rate.
This mortgage calculator shows you how much you would pay each month and over your mortgage term, assuming the rate remains the same. If your mortgage rate changes, you can use the calculator again to show what your payments would be on your new rate, as well as the change to the total amount over the term.
You can see the impact paying a higher or lower interest rate would have on your mortgage payments by using our interest rate calculator.
When choosing a mortgage, it’s important to consider any additional fees and charges you might have to pay.
Lenders usually charge two types of mortgage fee: an arrangement fee and a booking fee. The booking fee is a non-refundable charge paid on application that allows you to reserve the mortgage you want.
The arrangement fee is, as the name suggests, a fee charged by a lender to set up the mortgage on your behalf. It’s charged when your mortgage completes.
Often the mortgage deals with the lowest rates carry the biggest fees, so it’s important to factor these in when trying to work out the best deal for you. If you’re taking out a relatively small mortgage, for example, it may be cheaper to choose a deal with a slightly higher interest rate but lower fees. If, however, you’re taking out a larger mortgage, it might be more cost-effective to take out a mortgage with a lower rate.
You’ll also need to factor in the valuation fee, charged by lenders for commissioning a mortgage valuation, which is a basic inspection of your property, as well as the cost of a more detailed survey if needed.
It’s also worth bearing in mind that if you do take a fixed or discounted rate then often these will come with Early Repayment Charges, which mean that if you want to repay your mortgage before the deal is up you could incur a large fee. You can use our mortgage early repayment calculator to see the impact of paying your mortgage back before the end of your term.
Remember, too, that you’ll need to set aside money for Stamp Duty, if you’re buying a property over £125,000, as well as the Land Registry fee to transfer the property into your name. Finally, you’ll also pay for conveyancing, the legal process of transferring a property from one owner to another.
Although these aren’t really mortgage fees, it’s a good idea to be aware of the things you’ll have to pay for after completion.
Unless you do it all yourself, there will be removal costs for hiring a moving company to bring all of your stuff from your old place to your new home. And if you’re buying your first home, or are moving into a significantly larger property, you’ll need to kit out your home with furniture.
Depending on the type of property you’ve moved into, you may also have to pay ground rent and service charge, as well as insurance. You should bear all of these costs in mind when working out how much your new property will cost.
The cost of your monthly repayments depends on various factors, including the type of mortgage you’ve taken out. Your payments will depend on whether you have an interest only or repayment mortgage, how long you’ve borrowed it over and the rate you are on. Typically, your repayments will be lower with an interest only mortgage, as you’re only paying back the interest rather than the total amount borrowed but you will need to factor in the cost of making sure you have enough set aside to repay the mortgage at the end of the term. With a fixed rate mortgage, your monthly payments will remain the same for the term of your mortgage, but with a variable rate deal, they may change over time depending on interest rates. The amount you pay back monthly also depends on the length of your mortgage term. If you’ve chosen a 5-year term, your payments will be much higher than a 20-year term, for example.
Mortgage payments have two separate parts: the total amount you’ve borrowed (the capital) and the interest charged on your loan. If you have a repayment mortgage, your monthly payments will cover both of these parts, with a portion of your monthly payment going towards the capital, and the other part covering the interest on your debt. With an interest only mortgage you are only covering the interest with your mortgage payments so the amount you owe is not reducing each month. So in summary your mortgage payments are calculated based on the amount borrowed, the term of your mortgage, the type of mortgage you’ve chosen, and the interest rate. When you take out a mortgage through L&C, we’ll take you through the options and ensure you understand exactly how much you’ll have to pay back every month.
We've got lots of useful mortgage calculators to help you find out more about how much you can borrow, what it will cost, what fees will be involved and what else you should consider.