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Published 16 August 2022

Mortgage Interest Rate Calculator

Use our mortgage interest rate calculator to estimate how much your repayments could change if interest rates fluctuate.

Mortgage interest rate calculator

How do I calculate the interest on my mortgage?

The way you calculate interest on a mortgage depends on the type of mortgage you have.

Interest on fixed-rate mortgages is calculated by multiplying the loan amount by the interest rate. This can be broken down into the annual or monthly interest for the mortgage.

For example, let’s say your mortgage loan amount was £150,000 with an interest rate of 2%:

The annual interest = £150,000 x 0.02 = £3,000.

The monthly interest = £3,000 ÷ 12 = £250.

Interest on variable rate mortgages is more difficult to forecast because it’s virtually impossible to predict how often interest rates, and therefore your repayments, will increase or decrease during your mortgage term.

Our mortgage interest rate calculator could help you estimate how changes to your mortgage interest rate may change your mortgage repayments. This information is intended as a guide only and relies on certain assumptions. Always speak to your current provider for details of how interest rate changes might affect your mortgage repayments before comparing deals from other lenders or brokers.

» MORE: Repayment Mortgage Calculator


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Nerdwallet have partnered with Koodoo to provide mortgage comparisons from the UK’s leading providers.

Think carefully before securing other debts against your home. Your home may be repossessed if you do not keep up repayments on a loan or any other debt secured on it.

Are mortgage interest rates calculated daily or monthly?

Most mortgage interest rates are calculated monthly. You can always check with your lender directly to confirm your mortgage details specifically

What happens if interest rates rise or fall?

Unless you have a fixed-rate mortgage deal, mortgage repayments could change if interest rates rise or fall. For example, if you have a variable rate mortgage, you may have to pay more if interest rates rise or less if interest rates fall. Tracker mortgages, discount mortgages and standard variable rate (SVR) mortgages are also likely to be affected by interest rate fluctuations.

Mortgage repayments can become more expensive if interest rates rise and cheaper if they fall – though interest rate fluctuations are not always passed on immediately to borrowers. Mortgage rates may change due to fluctuations in the Bank of England’s base rate or because of competition in the mortgage market.

Where can I find the best mortgage deals for me?

The easiest way to find the best deal for you is by comparing mortgages. Price comparison websites can help you quickly search through lots of deals to find the most suitable lender.

If you need expert advice on the best types of mortgage to apply for, speaking to an independent mortgage adviser may help. They’ll review your financial circumstances and help you find a mortgage deal.

Useful links

About the Author

Brean Horne

Brean was a writer and spokesperson for NerdWallet who covered a variety of topics including money-saving tips, credit scores and managing debt. With over five years' experience in finance, she…

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