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Mortgage Calculator

Use our free online mortgage calculator to calculate your monthly mortgage payments and total to pay back, depending upon the term, size of your mortgage and interest rates. The monthly payment formula is based on the annuity formula. This mortgage calculator may use data from Halifax.

Monthly payment £1,328, Total to pay back £1,328
How much you'd like to borrow?
Interest rate
How long you'd like to borrow the money for?

The users of the mortgage calculator

Mortgage calculator is a great tool to calculate the cost of the mortgage and monthly repayment. This calculator is useful for people that plan to take out a mortgage and want to know how much money they will have to repay to the bank. For those people that already have a mortgage the calculator can help to check whether the amount of money they pay every month to the credit institution is accurate and correct. Although the calculator was intentionally created for people to calculate the cost of the mortgage, the calculator can be used for other loan types. However, it is important to remember that the repayment of these loans has to be based on the principle of annuity. The calculator is very simple and at the same time user friendly because instead of providing the users with numerous formulas and calculations this tool simply gives the final result.

The required data and the final result

The person is asked to provide 3 facts about the mortgage: the amount of the loan, time duration and interest rates. Time duration is calculated in years. Although the amount of the mortgage is expressed in British Pounds the calculator can be used for any other currency without any modifications. After all the necessary information is provided the calculator presents the user with two results: monthly payment and total payback.

Total payback is the true cost of the mortgage. This number shows how much money will have been paid to the bank by the creditor and will always be higher than the amount of money borrowed. The higher is the interest rate the bigger total payback amount will be. For example, a person that decided to borrow £10000 for ten years with 10% interest rate will have to repay the bank £15858. If the term of the loan remains the same and the interest rate is reduced to 5%, the total amount decreases and is only £12728.

The working principle of the calculator

The calculator is based on the principle of annuity. Although annuity formula and detailed calculations for simplicity reasons are not shown in the output section of the calculator, all the final results that can be seen by the user are calculated using annuity formula.

PV= Pr [1-1+rt]

  • PV - present value of the annuity
  • P - annual amount payable to the bank
  • r - interest rate
  • t - number of payments

The present value of an annuity is equal to the amount borrowed from the bank. Annual amount payable to the bank can be simple calculated by multiplying the annual amount payable per moth by 12. Annuity can also be calculated using monthly data instead of annual data. However, than interest rate also has to be modified. For example, 12% annual interest rate equals 1% monthly interest rate. Once all the data is inputted in the formula and the annual payable back to the bank amount is calculated, the future value of the loan can be estimated by multiplying this amount by the number of years the loan is owed to the bank. However, the calculator simply allows the user to save time for numerous calculations and get the result by simply inserting only a couple facts about the loan.