UK · GBP · Core mortgage tools
Interest-Only and Repayment Comparison
Compare an interest-only phase with repayment from the outset and the later P&I payment.
Reference scope documented 2026-10-25. Residential tax bands are jurisdiction-specific. Rates, fees, budget buffers and lender ratios must come from current quotes or clearly labeled assumptions. Confirm legal buyer status and scheme conditions.
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Your estimate
Press Calculate estimate after entering your figures.
Educational estimate, not financial advice. Disclaimer · Methodology · Corrections.
How this estimate works
Interest-only payments leave principal unchanged. The subsequent P&I calculation repays the original balance over the shorter remaining repayment period at the same assumed rate.
Assumptions and limits
- Amounts are GBP. Enter actual quotes, balances and costs. Planning settings are editable assumptions; no lender rate is fabricated.
- Monthly nominal-rate amortization; fixed-rate projection across the entered remaining repayment period. Actual daily accrual, payment dates, product fees, rate resets and lender rounding can differ.
- This is educational scenario arithmetic, not a mortgage offer, agreement in principle, tax assessment or scheme/credit approval.
- The later rate is held constant for comparison; lender approval and a capital repayment strategy are separate.
References and further reading
Worked United Kingdom example: Interest-Only and Repayment Comparison
This is a hypothetical arithmetic example in GBP, not a current lender quote, market observation or borrower record. The same calculator model produces the figures below. Its input assumptions are shown so that you can reproduce or change the scenario.
| Assumed input | Illustration value |
|---|---|
| Current principal including financed fees (GBP) | 262,500 |
| Actual / scenario annual nominal mortgage rate (%) | 4.48 |
| Remaining repayment years | 25 |
| Interest-only years before repayment | 5 |
| Calculated measure | Result |
|---|---|
| Interest-only monthly payment | £980.00 |
| Repayment payment from outset | £1,456.08 |
| Interest-only principal after entered period | £262,500.00 |
| Repayment-model balance at same point | £230,549.46 |
| P&I after interest-only period, at unchanged rate | £1,657.87 |
Amounts use unrounded intermediate arithmetic and are rounded only for display. Selecting different costs, rates, payment dates or terms changes the result; no illustration value is prefilled into your personal financial fields.