Calculate your monthly mortgage repayments and see how a interest rate change could affect your repayments.
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⚠️ Important Note: These estimations are for illustration purposes only. Taxes, insurance, and lender fees are not included.
How Mortgage Repayments Are Calculated?
Mortgage payments differ based on the selected repayment option:
1. Repayment (Capital & Interest):
Monthly payments reduce the borrowed capital while paying off the interest. Formula:
M = P * [ r * (1 + r)^n ] / [ (1 + r)^n - 1 ]
Where P is the mortgage amount, r is the monthly interest rate (annual rate / 12), and n is the total number of payments (months).
2. Interest-Only:
Payments cover only the monthly interest. The original borrowed amount remains unchanged and must be paid back in full at the end of the term. Formula:
M = P * r
Frequently Asked Questions
With a repayment mortgage, you pay back a portion of the capital (the loan amount) and the interest each month, meaning your debt will be fully paid off at the end of the term. With an interest-only mortgage, you only pay the interest on the debt each month, so the loan amount itself stays the same and must be paid back in full at the end.
If you have a variable rate or tracker mortgage, your monthly payments will increase if interest rates go up, and decrease if they go down. If you have a fixed rate mortgage, your payments will remain unchanged until the fixed period ends.
A longer mortgage term spreads the repayment of the capital over more years, resulting in lower monthly payments. However, you will pay interest over a longer period, significantly increasing the total amount of interest paid overall.
