Your monthly mortgage payment is calculated using an amortization formula that considers your loan amount, interest rate, and loan term. In the UK, most mortgages are repayment mortgages where each payment covers both interest and principal. The formula ensures that in the early years, a larger portion of your payment goes toward interest, while in later years, more goes toward paying down the principal. For a £200,000 mortgage at 3.5% over 25 years, your monthly payment would be approximately £1,002. Our calculator provides a detailed amortization schedule showing the exact breakdown of each payment.

In the UK mortgage market, you'll encounter several types of interest rates:

• Fixed-rate mortgages: Your interest rate stays the same for a set period (typically 2-5 years), providing payment stability regardless of market changes. Early repayment charges usually apply if you switch before the term ends.
• Tracker mortgages: These track the Bank of England base rate (e.g., base rate + 1%). Your payments will change whenever the base rate changes, offering flexibility but less predictability.
• Standard Variable Rate (SVR): The lender's default rate, usually higher than fixed or tracker rates. Most borrowers move off SVR after their initial deal ends.
• Discount mortgages: Offer a discount off the lender's SVR for a set period, after which you'll move to the standard variable rate.

The best choice depends on your financial situation, risk tolerance, and the current economic climate.

UK lenders typically offer between 4-4.5 times your annual income, though some may go up to 5-6 times for higher earners. For example:

• £30,000 salary: £135,000 - £180,000 (4.5-6x)
• £50,000 salary: £225,000 - £300,000 (4.5-6x)
• £75,000 salary: £337,500 - £450,000 (4.5-6x)

However, lenders also consider:

• Your credit score and history
• Monthly outgoings and existing debts
• Deposit size (typically 5-20% of property value)
• Employment status and stability
• Any additional income or bonuses

Our mortgage calculator provides an initial estimate, but for precise figures, consider speaking with a whole-of-market mortgage advisor who can assess your complete financial picture and access exclusive deals not available directly to consumers.

LTV is the percentage of the property's value that you're borrowing. For example, if you have a 20% deposit, your LTV would be 80%. Lower LTVs typically secure better interest rates as they represent less risk to the lender.

Additional costs include: arrangement fees, valuation fees, legal fees, stamp duty, survey costs, buildings insurance, and moving expenses. It's wise to budget 3-5% of the property price for these additional costs.