UK Mortgage Calculator Guide 2025: How Much Can You Borrow?

Buying a home is one of the biggest financial decisions you'll ever make. Understanding how mortgages work and what you can afford is essential before starting your property search. This comprehensive guide explains everything you need to know about UK mortgages in 2025.

How Much Can I Borrow?

UK lenders typically offer mortgages based on income multiples:

Annual Income	4× Multiple	4.5× Multiple
£30,000	£120,000	£135,000
£40,000	£160,000	£180,000
£50,000	£200,000	£225,000
£60,000	£240,000	£270,000
£75,000	£300,000	£337,500
£100,000	£400,000	£450,000

Affordability Assessment

Beyond income multiples, lenders assess:

• Monthly outgoings (loans, credit cards, childcare)
• Living expenses
• Credit score and history
• Employment stability
• Ability to afford payments if rates rise (stress testing)

Deposit Requirements

Your deposit affects both what you can borrow and what rates you'll get:

Deposit %	LTV	Rate Access
5%	95%	Limited options, higher rates
10%	90%	More options available
15%	85%	Good range of rates
20%	80%	Competitive rates
25%	75%	Best rates typically
40%+	60%	Premium rates available

Repayment vs Interest-Only Mortgages

Repayment Mortgage

Each monthly payment covers interest AND repays some of the loan. By the end of the term, you own the property outright.

Pros:

• Guaranteed to own home at end of term
• Build equity with every payment
• Peace of mind - no repayment vehicle needed

Cons:

• Higher monthly payments than interest-only

Interest-Only Mortgage

You only pay interest each month. The full loan amount is due at the end of the term.

Pros:

• Lower monthly payments
• Flexibility to invest the difference

Cons:

• Must have a repayment plan (savings, investments, property sale)
• Stricter eligibility criteria
• No equity built through payments
• Large sum needed at end of term

Monthly Payment Comparison

Mortgage	Repayment	Interest-Only
£200,000 at 5%	£1,169/month	£833/month
£300,000 at 5%	£1,754/month	£1,250/month
£400,000 at 5%	£2,339/month	£1,667/month

*Based on 25-year term

Types of Mortgage Rates

Fixed Rate

Interest rate stays the same for a set period (typically 2, 3, 5, or 10 years).

• Certainty over payments
• Protected from rate rises
• Can't benefit from rate drops
• Early repayment charges apply during fixed period

Variable/Tracker Rate

Rate moves with Bank of England base rate (or lender's SVR).

• Can benefit from rate cuts
• More flexibility (often no ERCs)
• Payments can increase if rates rise
• Harder to budget

Standard Variable Rate (SVR)

The lender's default rate when any deal ends. Usually higher than fixed or tracker rates - avoid staying on SVR if possible.

How Monthly Payments Are Calculated

Repayment mortgage monthly payment formula:

Additional Costs to Consider

Upfront Costs

• Stamp Duty: Tax on property purchases (see our Stamp Duty Calculator)
• Solicitor fees: £1,000-£2,000 typically
• Survey: £250-£1,000+ depending on type
• Mortgage arrangement fee: £0-£2,000
• Valuation fee: Often included free

Ongoing Costs

• Buildings insurance: Required by lender
• Life insurance: Recommended
• Service charges: For flats/leasehold
• Ground rent: For leasehold properties
• Maintenance/repairs: Budget 1% of property value per year

Mortgage Term Options

Longer terms mean lower monthly payments but more interest paid overall:

Term	Monthly Payment*	Total Interest*
15 years	£1,582	£84,700
20 years	£1,320	£116,800
25 years	£1,169	£150,700
30 years	£1,074	£186,500
35 years	£1,009	£223,700

*£200,000 mortgage at 5% repayment

First-Time Buyer Schemes 2025

Lifetime ISA

Save up to £4,000/year and receive 25% government bonus (max £1,000/year) towards your first home.

Shared Ownership

Buy 25-75% of a property and pay rent on the rest. Can "staircase" to full ownership over time.

First Homes Scheme

Discount of 30-50% on new-build homes for first-time buyers and key workers.

95% Mortgage Guarantee Scheme

Government-backed scheme helping first-time buyers access 95% LTV mortgages.

Improving Your Mortgage Chances

• Check your credit report: Fix any errors before applying
• Register on electoral roll: Essential for credit scoring
• Reduce existing debt: Pay down credit cards and loans
• Stop applying for credit: Each application leaves a footprint
• Build a deposit: More deposit = better rates
• Stable employment: Lenders prefer 3+ months in current job
• Reduce outgoings: Cancel unused subscriptions

When to Remortgage

Consider remortgaging when:

• Your fixed/introductory rate is ending (avoid SVR)
• You've built significant equity (access better rates)
• Interest rates have dropped significantly
• You want to release equity for home improvements
• You want to consolidate debts (be cautious)

Using Our Mortgage Calculator

Our free mortgage calculator helps you:

• Calculate monthly repayments for any loan amount
• Compare repayment vs interest-only
• See total interest paid over the term
• Understand how deposit size affects payments
• Plan for different interest rate scenarios

Conclusion

Getting the right mortgage requires understanding your borrowing capacity, choosing the right product, and considering all associated costs. Take your time to:

• Calculate what you can realistically afford
• Save the largest deposit possible
• Compare deals from multiple lenders
• Consider using a mortgage broker
• Factor in all buying costs, not just the deposit

Disclaimer: This guide is for informational purposes only. Mortgage decisions should be made with professional financial advice tailored to your circumstances.