UK Mortgage Payment and Affordability Calculator
Compare repayment and interest-only payments, borrowing estimates, fees and a rate-change stress test.
What this calculator explains
Mortgage payment and lender affordability are different calculations. The repayment formula can estimate principal and interest, while a lender also assesses income, commitments, credit, deposit, property, term and stress scenarios. The affordability result is therefore an indicative range, not a borrowing approval.
Interest-only mode shows that scheduled payments do not reduce the capital balance and requires a separate repayment strategy. Fees and stress-test assumptions are displayed independently from the initial payment.
How the estimate is calculated
- Subtract deposit from property price and add any fees being financed.
- Calculate repayment mortgage payment with the amortisation formula or interest-only payment from principal × rate.
- Calculate loan-to-value ratio.
- Compare the entered payment with monthly income and commitments.
- Apply a user-selected rate stress and show the payment change.
- Display total interest and end balance under each scenario.
Formula
Repayment mortgage payment uses the standard amortisation formula; interest-only monthly payment = loan balance × annual rate ÷ 12
Worked example
A £300,000 repayment mortgage at 4.5% over 25 years has an estimated monthly principal-and-interest payment of about £1,667.50. The calculation then adds any financed fee, shows the loan-to-value ratio and compares a higher-rate stress scenario. Buildings insurance, council tax, service charges and maintenance belong in the wider housing budget.
Current rules and configuration notes
- Repayment mortgage payments use standard amortisation; interest-only mode calculates interest without scheduled capital reduction.
- Affordability is an indicative scenario, not a lender decision, and must incorporate user-entered commitments and stress assumptions.
- Fees and changes in interest rate must be shown separately from the initial payment.
Update requirement: Payment formulas are evergreen; consumer guidance and lender-market explanations should be reviewed periodically.
Included in the estimate
- Repayment and interest-only modes
- Deposit, financed product fees and loan-to-value
- Monthly payment and total interest
- Rate-stress scenario
- Income and commitment planning view
- Side-by-side products
Not included or not guaranteed
- A decision in principle or mortgage offer
- Credit scoring and detailed lender criteria
- Every product fee or early-repayment charge
- Council tax, insurance, service charge and maintenance unless entered
- Advice that interest-only is suitable
Frequently asked questions
How is a repayment mortgage calculated?
Each payment covers interest and reduces capital so the balance reaches zero at the end of the term if payments and rate follow the schedule.
How is interest-only different?
Scheduled payments normally cover interest without reducing capital, so a repayment plan for the original balance is needed.
What is loan-to-value?
LTV is the mortgage amount divided by the property value. A larger deposit produces a lower LTV.
How much can I borrow?
Lenders use their own affordability and underwriting rules. Toolistify can model a budget range but cannot promise an amount.
Should I add the product fee to the loan?
Financing the fee reduces cash needed upfront but increases the balance and interest. The comparison shows both the pay-upfront and add-to-loan options.
Why use a rate-stress scenario?
It shows how payments could change at a higher rate, which can help users assess resilience after an initial deal ends.
Official sources
Applicable period: 2026 · Last reviewed: September 3, 2026
Recommended internal links
See what overpayments could change
Send the loan, rate and term to the overpayment calculator to compare time and interest savings.
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