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Mortgage Calculator

Want to know what a mortgage costs per month? Enter the loan amount, interest rate and term to instantly calculate your monthly payment using the annuity method.

ยฃ
%
years

Result

ยฃ1,397.87

Monthly payment

Total to repay
ยฃ503,233.94
Total interest
ยฃ203,233.94

Formula

M = P ยท r รท (1 โˆ’ (1 + r)^โˆ’n)

P is the loan amount, r the monthly rate (annual rate รท 12 รท 100) and n the number of months (term ร— 12). With an annuity mortgage the monthly payment stays constant; the interest portion falls and the repayment portion rises over time.

Step by step

  1. 1Find the monthly rate: 3.8% รท 12 = 0.3167% per month.
  2. 2Calculate the number of months: 30 ร— 12 = 360.
  3. 3Enter the values into the formula.

Worked examples

โ‚ฌ 300,000, 3.8% rate, 30 years

โ†’ Monthly payment โ‰ˆ โ‚ฌ 1,397 gross.

Common mistakes

  • Using the annual rate directly as the monthly rate.
  • Forgetting this is the gross payment, excluding tax relief and insurance.

When to use it

  • Estimating whether a home is affordable.
  • Comparing different terms and interest rates.

Frequently asked questions

Is this a net or gross monthly payment?

This is the gross payment. Your actual net cost may be lower due to, for example, mortgage interest tax relief.

How does this differ from a linear mortgage?

With a linear mortgage you repay a fixed amount each month, so the payment falls. With an annuity mortgage the payment stays constant.

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