Mortgage Interest Calculator
Annual Interest vs Capital Breakdown
How Mortgage Interest Works
When you take out a mortgage, you borrow a large sum from a lender and repay it with interest over a set term (typically 25-35 years in the UK). Interest is charged on the outstanding balance, which means in the early years of a repayment mortgage, most of your monthly payment goes towards interest rather than paying down the loan.
Repayment vs Interest-Only Mortgages
Capital repayment mortgages pay off both interest and a portion of the loan each month. By the end of the term, the mortgage is fully paid off. Monthly payments are higher but total cost is lower.
Interest-only mortgages only cover the interest each month. The original loan amount remains unchanged and must be repaid in full at the end of the term. Monthly payments are lower but you'll need a strategy to repay the capital (savings, investments, or selling the property).
Current UK Mortgage Rates
As of 2026-02-17, average UK mortgage rates are approximately:
- 2-year fixed: 5.5%
- 5-year fixed: 5.25%
- Standard Variable Rate (SVR): 7.75%
These rates are influenced by the Bank of England base rate (currently 4.5%) and are typically higher than the base rate to cover the lender's costs and profit margin.
Frequently Asked Questions
How much interest will I pay on my mortgage?
On a typical £200,000 25-year repayment mortgage at 5.5%, you'd pay approximately £165,000 in total interest — nearly as much as the original loan. The amortisation chart above shows how this interest is front-loaded in the early years.
Should I get a 2-year or 5-year fixed rate?
A 2-year fix typically offers a slightly lower rate but you'll need to remortgage sooner (with potential fees). A 5-year fix provides longer-term certainty. Currently, the gap between them is about 0.25 percentage points.
Compare Mortgage Deals
Ready to find a mortgage? Compare current deals from UK lenders:
- Compare mortgages on MoneySupermarket
- Get a personalised rate from Habito
- Compare mortgage deals on Compare the Market
Some links may be affiliate links. We may receive a commission at no extra cost to you. This does not influence our calculator results.
You might also need
Current UK Interest Rates
Rates as of 2026-02-17. Source: Bank of England Interactive Analytical Database (IADB).