How much is a £250,000 mortgage a month?
About £1,390 a month on a repayment mortgage over 25 years at 4.5%. At 4% it is £1,320; at 5% it is £1,461. Interest-only at 4.5% would be £938 a month, but the £250,000 is still owed at the end of the term. Here is the same calculation across the loan sizes and rates people most often ask about:
| Loan | At 4% | At 4.5% | At 5% | At 5.5% | Interest-only, 4.5% |
|---|---|---|---|---|---|
| £100,000 | £528 | £556 | £585 | £614 | £375 |
| £150,000 | £792 | £834 | £877 | £921 | £562 |
| £200,000 | £1,056 | £1,112 | £1,169 | £1,228 | £750 |
| £250,000 | £1,320 | £1,390 | £1,461 | £1,535 | £938 |
| £300,000 | £1,584 | £1,667 | £1,754 | £1,842 | £1,125 |
| £400,000 | £2,111 | £2,223 | £2,338 | £2,456 | £1,500 |
| £500,000 | £2,639 | £2,779 | £2,923 | £3,070 | £1,875 |
Payments scale exactly with the loan at a given rate and term, so £500,000 costs precisely twice what £250,000 costs. Rates do not scale that way: a single percentage point on £250,000 is £142 a month, which is £42,565 over a 25-year term. That is why the loan-to-value band your deposit puts you in matters more than it looks.
Is a 25 or 30 year mortgage better?
A 30-year term on £250,000 at 4.5% costs £1,267 a month against £1,390 over 25 years, so £123 less. Total interest goes from £166,874 to £206,017. The longer term buys monthly affordability for about £39,000 of lifetime cost.
| Term | Monthly payment | Total interest | Against 25 years |
|---|---|---|---|
| 20 years | £1,582 | £129,590 | −£37,285 |
| 25 years | £1,390 | £166,874 | — |
| 30 years | £1,267 | £206,017 | +£39,142 |
| 35 years | £1,183 | £246,920 | +£80,045 |
Which is better depends on which risk you are managing rather than which number is smaller. A longer term lowers the committed payment, which is protection against a drop in income, and you can overpay to shorten it again when things are comfortable. A shorter term forces the saving and costs less overall, but the commitment is fixed and a difficult year is harder to absorb. If you take the long term and overpay, the overpayment calculator shows what each amount claws back.
Why is most of my mortgage payment interest?
Interest is charged on what you still owe, and at the start you owe almost all of it. On £250,000 at 4.5%, the first payment of £1,389.58 is £937.50 interest and only £452.08 capital — 67% of it never touches the balance. The split does not reach halfway until month 116, nearly ten years in.
The consequence is worth seeing in cash. After five years you have paid about £83,375 and the balance has fallen from £250,000 to roughly £219,645: around £30,355 of progress for £83,375 of payments. This is not a quirk of the product, it is arithmetic, and it is the reason overpayments are so much more powerful early than late. The overpayment calculator works out how much extra to pay on your mortgage and what each amount saves.
How do I work out the interest rate from my monthly payment?
Switch the input mode above from a rate to a payment. Enter the loan, the term and what you actually pay, and the calculator solves the same formula backwards for the rate that would produce that figure. Most calculators only run forwards, and this is the quicker direction when you are checking a quote: if the implied rate is not close to the rate you were offered, there is something else inside the payment, and it is usually a product fee added to the loan.
How the monthly payment is worked out
A repayment mortgage is an amortising loan: every month you pay the interest that has accrued on the balance, and whatever is left of your payment comes off the balance itself. The payment is the number that makes that process finish exactly on the last month of the term. The standard formula, which is what this calculator uses, is:
M = P × r × (1 + r)^n ÷ ((1 + r)^n − 1)
P is the amount borrowed, n is the number of monthly payments (the term in years multiplied by twelve) and r is the monthly interest rate, the annual rate divided by twelve, so 4.5% a year becomes 0.375% a month. Read the formula from the inside out and it is less forbidding than it looks: (1 + r)^n is how much one pound grows to over the whole term at that rate, and the rest of the expression scales the payment so the growth of your balance and the growth of your payments cancel out at the end.
Interest-only mode
Switch the calculator to interest-only and the payment becomes simply P × r, or £937.50 a month on the same loan. The balance never moves, because nothing is being repaid. At the end of the term the full £250,000 is still owed and has to be settled some other way, from an investment, a sale, or a remortgage. The payment looks attractive for the same reason the arrangement is demanding: it is only ever renting the money.
What this calculator does not include
It models the loan and nothing else. A real monthly housing cost usually adds buildings insurance, ground rent and service charge on a leasehold flat, and any life or income protection your lender asked for. The purchase itself carries stamp duty, conveyancing and survey fees, which are separate from the mortgage and generally payable in cash. The house sale what-if calculator is the one that sweeps those into a single figure.
Two loan-level details are also outside the model. Product fees are often added to the loan rather than paid up front, which quietly increases P and means you pay interest on the fee for the rest of the term. And the rate here is fixed for the whole term, which is not how UK mortgages work in practice.
How UK mortgages actually behave
A UK mortgage is typically a 25 or 30 year term with a two, three or five year fixed-rate deal bolted to the front of it. When the fixed period ends the loan reverts to the lender's standard variable rate, which is usually well above what you could get by remortgaging, so most borrowers move to a new deal at that point. Modelling the whole term at today's rate is the right way to compare products, but it is not a forecast: the honest reading of the total interest figure is "if this rate held for 25 years", and it will not.
The rate you are offered depends heavily on loan-to-value, the loan as a percentage of the property value. Lenders price in bands, commonly at 60%, 75%, 80%, 85%, 90% and 95%, and the difference between two adjacent bands can be a meaningful chunk of a percent. If you are close to a boundary, a relatively small increase in deposit can move you into a cheaper band and be worth far more than the same money paid off later. It is one of the few points in the process where a few thousand pounds changes the price of everything that follows.
Common questions
Why is my lender's figure slightly different?
Small differences are normal and usually come down to conventions. This calculator converts the annual rate to a monthly one by dividing by twelve; many UK lenders charge interest daily and apply it monthly, so the exact amount varies with the number of days in the month. Lenders also round the payment, may add a product fee to the loan, and sometimes quote an initial payment that reflects a part-month at completion. Differences of a few pounds are conventions; differences of tens of pounds usually mean a fee or a rate you have not accounted for.
Does this include everything I will pay?
No. It models the loan and nothing else. Buildings insurance, ground rent and service charge on a leasehold flat, and any life or income protection your lender asked for all sit on top, and the purchase itself carries stamp duty, conveyancing and survey fees payable in cash. The house sale what-if calculator sweeps those into a single figure.
Figures on this page are illustrative and rounded, and assume the rate holds for the whole term, which is not how UK mortgages work in practice. This is general information, not financial advice; confirm any number that matters with your lender or a qualified adviser.