Mortgage Comparison Calculator UK

How to Use the Mortgage Comparison Calculator

Finding the cheapest mortgage deal in the UK requires looking beyond the headline interest rate. A mortgage with a lower rate but a high arrangement fee could cost you more overall than one with a slightly higher rate and no fee. Our mortgage comparison calculator makes it straightforward to find the true cost of each deal by factoring in all relevant numbers.

To use the calculator, simply enter the loan amount, annual interest rate, mortgage term in years, and any arrangement or product fee for each mortgage you want to compare. The calculator will then work out the monthly payment, total repayment amount, total interest paid, and an effective annual rate that accounts for the fees. The cheapest deal overall is highlighted automatically in green.

Understanding UK Mortgage Costs in 2025

The UK mortgage market in 2025 continues to offer a wide range of products, from short-term fixed-rate deals to tracker mortgages that follow the Bank of England base rate. With the base rate having peaked in 2023 and subsequently declining, many borrowers are now remortgaging onto deals that were not available a year ago.

When comparing mortgages, the key figures to understand are:

• Monthly payment: How much you pay each month, calculated using standard mortgage amortisation.
• Total repaid: Monthly payment multiplied by the number of months in the term.
• Total interest: Total repaid minus the original loan amount.
• Total cost: Total repaid plus any upfront fees (arrangement fee, booking fee, etc.).
• Effective rate: The annualised cost of the mortgage including fees spread over the full term.

UK Mortgage Types Explained

Fixed Rate Mortgages

Fixed rate mortgages lock your interest rate for a set period, typically 2, 3, or 5 years, and sometimes as long as 10 years. Your monthly payment stays the same throughout the fixed period regardless of what happens to interest rates in the wider economy. At the end of the fixed period, you will normally be moved onto the lender's Standard Variable Rate (SVR), which is usually much higher, so most borrowers remortgage at this point.

In 2025, the most popular products are 2-year and 5-year fixed mortgages. The choice between them depends on your view of future interest rate movements and how important payment certainty is to you. Longer fixed terms usually carry slightly higher rates as you are paying a premium for that security.

Tracker Mortgages

A tracker mortgage moves in line with the Bank of England base rate plus a set margin (for example, base rate + 1%). If the base rate rises, your monthly payments increase; if it falls, they decrease. Tracker mortgages often have lower arrangement fees and no early repayment charges, making them suitable for borrowers who expect rates to fall or who want the flexibility to overpay or pay off the mortgage early without penalty.

Standard Variable Rate (SVR) Mortgages

The SVR is a lender's default rate, set at their discretion. It typically sits 2-5 percentage points above the base rate and changes at the lender's discretion rather than automatically following the base rate. Remaining on an SVR is almost always the most expensive option. Our comparison calculator demonstrates just how significant the cost difference can be between a competitive deal and the SVR.

Mortgage Fees in the UK

UK mortgage fees can add thousands of pounds to the cost of a deal. Common fees include:

• Arrangement/product fee: The main fee charged by the lender, ranging from £0 to £2,000 or more.
• Booking/application fee: A non-refundable fee paid upfront when you apply, typically £99 to £250.
• Valuation fee: Covers the lender's assessment of the property's value, usually £150 to £1,500 depending on the property value.
• Conveyancing/legal fees: Paid to your solicitor for handling the legal transfer of ownership, typically £800 to £1,500.
• CHAPS/transfer fee: For electronically transferring the mortgage funds, around £25 to £50.
• Higher lending charge (HLC): Sometimes applied when the loan-to-value exceeds 90%, though these have become less common.

Some lenders allow you to add the arrangement fee to the loan. While this reduces your upfront outlay, it means you pay interest on the fee for the full mortgage term, increasing the overall cost. Our calculator treats fees as upfront costs, which is the most common and cost-effective approach.

Loan to Value (LTV) and Mortgage Rates

Your loan-to-value ratio, which is the mortgage amount as a percentage of the property's value, is one of the most important factors in determining the rate you are offered. Lenders tier their rates, offering the best deals to borrowers with the lowest LTV. In 2025, typical LTV tiers are 60%, 70%, 75%, 80%, 85%, 90%, and 95%.

A first-time buyer with only a 5% deposit (95% LTV) will typically pay significantly more than a homeowner who has built up 40% equity (60% LTV). For example, the difference between a 60% LTV rate and a 95% LTV rate might be 1 to 2 percentage points. On a £200,000 mortgage over 25 years, each percentage point difference in rate amounts to approximately £100 more per month, or £30,000 over the full term.

Mortgage Affordability Checks in 2025

Since the Mortgage Market Review (MMR) introduced by the Financial Conduct Authority (FCA), lenders must carry out thorough affordability assessments before approving a mortgage. This goes beyond simply checking your income; lenders now examine all your regular outgoings including childcare, commuting costs, subscriptions, and existing debt payments.

In 2025, the FCA removed the mandatory stress test requirement that lenders had to check affordability at 3 percentage points above the product rate, replacing it with individual lender assessments. However, most mainstream lenders still apply significant stress tests as a matter of responsible lending practice.

When to Remortgage

The best time to remortgage is typically when your current fixed-rate or discounted deal is coming to an end, usually 3 to 6 months before the end of the deal period. Shopping around at this point allows you to lock in a new rate before reverting to the often much more expensive SVR. Many mortgage offers are valid for 3 to 6 months, so you can agree a new deal in advance and switch seamlessly when your current deal ends.

You might also consider remortgaging mid-term if rates have fallen significantly, though you should check whether any early repayment charges (ERCs) make this cost-effective. Our mortgage comparison calculator can help you determine whether the savings from switching outweigh any early repayment penalties.

First-Time Buyer Schemes in 2025

The UK government offers several schemes to help first-time buyers get on the property ladder. These include the Lifetime ISA (LISA), which provides a 25% government bonus on savings of up to £4,000 per year, and the First Homes scheme, which offers properties at a 30% to 50% discount to local first-time buyers. Shared Ownership allows you to buy a percentage of a property (typically 25% to 75%) and pay rent on the remainder, with the option to buy more shares over time. All of these schemes affect the loan amount you need and therefore the mortgage comparison you should be making.

Frequently Asked Questions