Monthly payment on a £250,000 UK mortgage at 4.5% for 25 years
A £250,000 loan at 4.5% over 25 years costs £1,389.58 a month. You pay £166,874 in interest, £416,874 in total.
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The numbers for these inputs
| Year | Principal paid | Interest paid | Balance left |
|---|---|---|---|
| 1 | £5,538 | £11,137 | £244,462 |
| 2 | £5,793 | £10,882 | £238,669 |
| 3 | £6,059 | £10,616 | £232,610 |
| 4 | £6,337 | £10,338 | £226,273 |
| 5 | £6,628 | £10,047 | £219,645 |
| 6 | £6,933 | £9,742 | £212,712 |
| 7 | £7,251 | £9,424 | £205,461 |
| 8 | £7,584 | £9,091 | £197,876 |
| 9 | £7,933 | £8,742 | £189,943 |
| 10 | £8,297 | £8,378 | £181,646 |
| 11 | £8,678 | £7,997 | £172,968 |
| 12 | £9,077 | £7,598 | £163,891 |
| 13 | £9,494 | £7,181 | £154,397 |
| 14 | £9,930 | £6,745 | £144,466 |
| 15 | £10,386 | £6,288 | £134,080 |
| 16 | £10,864 | £5,811 | £123,216 |
| 17 | £11,363 | £5,312 | £111,853 |
| 18 | £11,885 | £4,790 | £99,969 |
| 19 | £12,431 | £4,244 | £87,538 |
| 20 | £13,002 | £3,673 | £74,536 |
| 21 | £13,599 | £3,076 | £60,937 |
| 22 | £14,224 | £2,451 | £46,713 |
| 23 | £14,877 | £1,798 | £31,836 |
| 24 | £15,561 | £1,114 | £16,276 |
| 25 | £16,276 | £399 | £0 |
How it works
A fixed-rate loan is repaid with the same payment every month. The payment is chosen so that, after the last one, the balance is exactly zero: payment = amount x r / (1 - (1 + r)^-n), where r is the monthly rate (yearly rate / 12) and n is the number of months.
Each month the interest is the balance times r. The rest of the payment reduces the balance. Early on most of the payment is interest; later most of it is principal, which the year-by-year table shows.
The result does not include fees, insurance, taxes or a variable rate. Your lender's figure can differ a little, so use this to compare options, then ask for the official schedule.
Common mistakes
- Comparing loans by monthly payment alone: a longer term lowers the payment but raises the total interest.
- Forgetting that the quoted rate and the APR can differ once fees are included.
- Not checking whether extra payments go to principal; paying a little extra early saves the most interest.
- Using the headline rate for a variable-rate loan, which can rise.
Questions
What is the monthly payment on £250,000 at 4.5%?
£1,389.58 a month for 300 months, assuming a fixed rate and equal payments.
How much interest will I pay in total?
£166,874, which is 66.75% of the amount borrowed. The total repaid is £416,874.
How do I pay less interest?
Choose a shorter term, make a larger down payment, or pay extra toward the principal. Change the term slider to see the trade-off between payment and total interest.
Does this include fees or insurance?
No. It covers principal and interest only. Add origination fees, insurance or property taxes separately; for a mortgage they can add a large share to the monthly cost.
Why is the first year mostly interest?
Interest is charged on the remaining balance, which is highest at the start. As the balance falls, a larger part of each equal payment goes to principal.
More loan payment examples
- Monthly payment on a $20,000 car loan at 7% for 5 years
- Monthly payment on a $30,000 car loan at 6.5% for 6 years
- Monthly payment on a $10,000 personal loan at 9% for 3 years
- Monthly payment on a $5,000 personal loan at 12% for 2 years
- Monthly payment on a $30,000 student loan at 5% for 10 years
- Monthly payment on a $50,000 student loan at 5.5% for 10 years
- Monthly payment on a $300,000 mortgage at 6.5% for 30 years
- Monthly payment on a $300,000 mortgage at 6% for 15 years
- Monthly payment on a $400,000 mortgage at 6.75% for 30 years