Example result based on the prefilled values.
Monthly Payment
£916.67
Total Interest
£275,000.00
Capital Due
£200,000.00
Continue your plan
Useful next calculations
Rates & sources
Interest-only payments cover interest but do not reduce the capital. The full original balance remains due unless separate capital repayments are made.
Source: MoneyHelper — repaying an interest-only mortgage — check the linked guidance and any live quote before acting.
When to use this calculator
- Before comparing lenders, brokers, or repayment options.
- When you want to test how a different deposit, rate, or term changes affordability.
- When you need a quick estimate before using a formal quote or agreement in principle.
- When you are stress-testing your budget against a potential rate rise to see the impact on monthly payments.
- When you want to understand the full cost of borrowing — not just the monthly figure — before you commit.
Example: separating the interest payment from the capital plan
Use these sample inputs as a quick scenario test, then change one variable at a time to compare outcomes.
Mortgage balance
£240,000
Interest rate
5.25%
Mortgage term
25 years
Capital due at the end
£240,000
The monthly figure covers interest only. Compare it with a repayment mortgage and calculate how much must be set aside each month to build a realistic route to repaying the unchanged capital balance.
How to read your results
Monthly Payment
Use this to check whether the scenario fits comfortably within your regular budget. If it looks tight, rerun the tool with a longer term or larger deposit to find the boundary of affordability.
Total Interest
This shows the long-run cost of borrowing beyond the original principal, which is especially useful when comparing terms or weighing up overpayment options. A shorter term usually cuts this figure significantly even if the monthly payment rises.
Capital Due
Use this metric to compare scenarios side by side and understand how changes in the key inputs drive the final outcome. If the figure surprises you, isolate one variable at a time and rerun the calculation to identify which assumption is responsible.
Method & assumptionsAuthoritative sources
An interest-only mortgage means your monthly payment covers only the interest charged on the outstanding loan — the original capital remains unchanged throughout the term and must be repaid in full at the end. This calculator computes the monthly interest charge by applying the annual rate (divided by 12) to the full loan balance, which remains constant because no capital is being repaid. In practice, the interest rate on your mortgage will likely change over time as fixed or tracker periods end and you remortgage, so the real cost will fluctuate. The calculator does not model the performance of any associated repayment vehicle. UK lenders require a verified, independent repayment strategy before granting an interest-only loan; the FCA mandates regular contact between lenders and borrowers to monitor repayment plans throughout the mortgage term.
Common mistakes
- !Mixing up loan amount and property value, which can distort affordability and LTV.
- !Using a headline rate but forgetting fees, insurance, taxes, or repayment type.
- !Testing only one term length instead of comparing the payment and total cost together.
- !Forgetting that a repayment mortgage and an interest-only mortgage produce very different monthly figures and total costs.
- !Not accounting for the impact of a rate revert after an introductory fixed period ends, which can sharply increase payments.
What to do next
- Write down the full capital balance and term-end date rather than focusing only on the monthly interest payment.
- Stress-test the payment at a higher rate and check whether the separate repayment strategy remains affordable.
- Compare the same loan with a repayment mortgage and discuss any shortfall with the lender or a regulated mortgage adviser early.
Frequently asked
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