How to use this mortgage calculator

Enter the amount you want to borrow, the interest rate on the deal you’re considering, and your mortgage term in years. The calculator works for both repayment mortgages (where you pay off capital and interest each month) and interest-only mortgages (where you only pay the interest, leaving the full balance to repay at the end).

The optional overpayment field shows you the powerful effect of paying even a small extra amount each month — how much total interest you save and how many years earlier you pay the mortgage off.

The property value field calculates your loan-to-value (LTV) ratio, which determines which mortgage deals you’ll be eligible for.

UK mortgage rates in 2025/26

As of early 2026, average two-year fixed rates sit around 4.3–4.7% and five-year fixes around 4.1–4.5% depending on LTV. Rates vary significantly by LTV band — borrowers with 40% or more equity typically access the keenest rates, while those with a 5% deposit (95% LTV) face higher rates reflecting the additional lender risk.

2025/26 Benchmark Rates

2-year fixed (60% LTV): ~4.0–4.3%  ·  5-year fixed (60% LTV): ~3.9–4.2%  ·  2-year fixed (90% LTV): ~4.7–5.2%  ·  SVR (standard variable rate): ~7.5–8.5%

Repayment vs interest-only mortgages

A repayment mortgage means each monthly payment covers both interest and a portion of the capital (the loan itself). By the end of the term, you own the property outright. This is by far the most common type for residential buyers in the UK.

An interest-only mortgage means your monthly payments cover only the interest charge — the capital remains unchanged throughout the term. At the end of the term, you still owe the original loan in full and need a separate repayment vehicle to clear it. Interest-only is more common for buy-to-let investors, where rental income covers the interest and the property itself is the repayment vehicle at sale.

The power of overpayments

Most UK mortgage deals allow overpayments of up to 10% of the outstanding balance per year without incurring early repayment charges (ERCs). Even modest overpayments have a dramatic compound effect over a 25-year term. An extra £200 per month on a £250,000 mortgage at 4.5% over 25 years saves over £30,000 in interest and cuts about 5 years off the term.

The reason overpayments work so powerfully is that you’re reducing the principal on which future interest is calculated. Every pound you overpay in year 1 saves you far more than a pound overpaid in year 20, because it reduces interest accumulation across all remaining years.

Loan-to-value (LTV) and why it matters

LTV is your mortgage as a percentage of the property’s value. A £200,000 mortgage on a £250,000 property is 80% LTV. LTV is one of the most important factors in determining the interest rate you’re offered — lenders view higher LTV as higher risk and price accordingly.

Key LTV thresholds where rates typically improve: 95%, 90%, 85%, 80%, 75%, 70%, 60%. If you’re close to one of these thresholds, it may be worth saving a little more deposit or making an early overpayment to cross into a lower LTV band and unlock a better rate.

Frequently asked questions

How much can I borrow?
Most UK lenders use income multiples of 4–4.5x your gross annual income for affordability purposes. So on a £50,000 salary, you might borrow up to £225,000. Some lenders go to 5x or even 5.5x for high earners or specific professions (doctors, dentists, solicitors). Lenders also stress-test affordability at higher rates — typically 3% above the current rate — to ensure you could still afford payments if rates rise.
What is a good mortgage rate in the UK right now?
In early 2026, competitive rates for buyers with 40%+ equity (60% LTV) on a 5-year fix sit around 3.9–4.2%. For 75% LTV, expect around 4.2–4.5%. For 90% LTV, rates are typically 4.7–5.2%. These are indicative — actual rates depend on the lender, deal structure, and your individual circumstances. Using a fee-free mortgage broker is typically the best way to find the keenest rate for your situation.
What is an early repayment charge (ERC)?
An ERC is a fee charged by your lender if you repay more than the allowed overpayment limit during a fixed-rate period, or if you switch deals before the fixed term ends. ERCs are typically 1–5% of the outstanding loan, declining over the fixed period. For example, a 5-year fix might have a 5% ERC in year 1, 4% in year 2, down to 1% in year 5. Always check your ERC terms before making large lump-sum overpayments.
Should I get a 2-year or 5-year fixed rate?
This depends on your view of where rates are heading and how much certainty you want. A 5-year fix gives longer payment certainty and avoids the cost and hassle of remortgaging in 2 years. A 2-year fix gives more flexibility and is typically cheaper in the short term when the yield curve is flat or inverted. In 2025/26, 5-year fixes are close to 2-year fixes in rate, making them attractive for the additional security. Most mortgage brokers currently favour 5-year fixes for most buyers.
Is mortgage interest tax deductible?
For residential homeowners — no. Mortgage interest on your primary residence is not tax deductible in the UK. For buy-to-let landlords, Section 24 (in force since 2020) replaced full interest deductibility with a basic rate (20%) tax credit. This means higher-rate landlords can no longer offset their full mortgage interest against rental income, significantly affecting BTL profitability — see our Rental Income Tax Calculator for a full breakdown.