What does the Loan Calculator calculate?
Annuity Loan
Monthly payment stays constant. Early payments are mostly interest, later ones mostly principal repayment.
Repayment Loan
The principal repayment stays constant, so the total monthly payment decreases as the interest portion falls.
Overpayment
A lump sum payment reduces the remaining balance directly, shortening the term and saving total interest.
Frequently Asked Questions
On an annuity loan of £250,000 at 3.8% over 20 years, the monthly payment is about £1,489. Over the full term you pay roughly £107,296 in interest on top of the loan amount.
With an annuity loan the monthly payment stays the same throughout the term. The split between interest and principal repayment shifts over time: early payments are mostly interest, later ones mostly principal. It is the most common mortgage structure in Europe.
Almost always — if the loan interest rate exceeds the return you could earn on a safe savings account. An extra £5,000 per year on a £300,000 mortgage can save tens of thousands in interest and cut years off the term.
When your fixed-rate period ends you will need to remortgage at the current market rate. If rates have risen, your monthly payment will increase. Use this calculator to compare what different rates mean for your budget.
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⚠️ All calculations are for guidance only. Not a substitute for professional financial advice.