Mortgage Calculator

This mortgage calculator shows what a home loan really costs before you speak to a lender or broker. Enter the property price, your deposit (as a percentage or an amount), the interest rate and the term, choose a repayment or interest-only mortgage and, if you like, a regular monthly overpayment. It returns your monthly payment, the total interest over the life of the loan, your loan-to-value (LTV) ratio, the month the mortgage will be paid off, how much interest and time an overpayment saves, a rate-sensitivity table and a full year-by-year amortization schedule. It works in pounds, dollars, dirhams, rupees and euros.

A repayment mortgage uses the standard annuity formula M = P × r × (1 + r)^n ÷ ((1 + r)^n − 1), where P is the amount borrowed, r is the monthly rate (annual rate ÷ 12 ÷ 100) and n is the number of monthly payments. Each payment covers that month's interest first and the rest reduces the balance, so early payments are mostly interest and later ones mostly capital. An interest-only mortgage charges just P × r each month and leaves the whole loan to be repaid at the end, usually from savings, investments or the sale of the property. Any overpayment you enter goes straight to the balance, which cuts future interest and, on a repayment mortgage, ends the loan early.

Worked example: a £300,000 home with a 10% deposit (£30,000) means borrowing £270,000, an LTV of 90%. At 4.5% over 25 years the repayment is about £1,500.75 a month and total interest is about £180,224. Overpaying £200 a month cuts total interest to about £141,069, saving roughly £39,155, and clears the mortgage 58 months (4 years 10 months) early. The same loan on interest-only costs £1,012.50 a month, but you would pay £303,750 in interest and still owe the full £270,000 after 25 years.

Rules differ by country. In the UK there is no legal maximum LTV; lenders set their own limits and price in LTV tiers, so a bigger deposit usually unlocks a lower rate, and you also pay Stamp Duty Land Tax (or LBTT in Scotland and LTT in Wales) on top of the deposit. In the UAE, the Central Bank caps mortgage lending: expatriates buying a first home can borrow up to 80% of the value for properties up to AED 5 million and 70% above that, UAE nationals 85% and 75%, expatriates buying a second or investment home 60%, and off-plan purchases are capped at 50%. In Pakistan, the State Bank's Housing Finance Prudential Regulations-2026 allow a maximum LTV of 90:10, a maximum tenor of 30 years and total monthly instalments of up to 65% of net disposable income. Use the 'check against local rules' option to flag a deposit that is too small.

In Pakistan most home finance is offered by Islamic banks and Islamic windows as Diminishing Musharakah, where the bank and buyer co-own the house, the buyer gradually purchases the bank's share and pays rent on the bank's portion. The monthly instalment behaves much like a reducing-balance mortgage and the rental rate is usually benchmarked to KIBOR, so it is reset periodically. Conventional and Islamic products alike can therefore be estimated with this calculator by entering the current benchmark plus the bank's margin; always confirm the exact profit rate, repricing frequency and fees in the bank's key fact statement.