Loan Calculator

How monthly repayments work

The calculator uses the standard amortisation formula. It takes the loan amount, annual interest rate, and term in years, then works out the fixed monthly payment that will pay off the entire loan including interest over that period. Early payments go mostly towards interest, with the balance shifting towards principal over time.

Interest rate vs APR

The interest rate is the basic cost of borrowing. APR (Annual Percentage Rate) includes the interest rate plus any fees or charges, giving a more complete picture of the total cost. When comparing loans, APR is the better figure to use. This calculator uses the interest rate for simplicity.

How the loan term affects total cost

A longer term means lower monthly payments but more interest paid overall. A £200,000 mortgage at 4.5% over 25 years costs about £111,000 in interest. Over 30 years, monthly payments drop by roughly £100 but total interest rises to about £137,000. Use the calculator to compare different terms and find the right balance for your budget.