Mortgage Calculator UK: Monthly Payments, Stamp Duty & How Much You Can Borrow

## UK Mortgages Work Differently From the US — Here's What Changes If you've read American mortgage guides, most of the numbers are wrong for the UK. No 30-year fixed rates. Stamp Duty Land Tax instead of closing costs. Loan-to-value thresholds at 60%, 75%, 85%, and 95% instead of the US 80%. Help to Buy is closed but Shared Ownership still exists. This guide covers the UK-specific calculations. Use our [mortgage calculator](/category/finance/mortgage-calculator) to run your own numbers. --- ## UK Mortgage Rates in 2026 UK mortgages are almost always fixed for an initial term (2, 3, or 5 years), then revert to the lender's Standard Variable Rate (SVR) — which is almost always higher. Most borrowers remortgage at the end of the fixed term to avoid the SVR. | Product | Approximate Rate (mid-2026) | |---------|-----------------------------| | 2-year fixed (60% LTV) | 4.2–4.6% | | 2-year fixed (85% LTV) | 4.8–5.3% | | 5-year fixed (60% LTV) | 4.0–4.4% | | 5-year fixed (85% LTV) | 4.5–5.0% | | Standard Variable Rate (SVR) | 7.5–8.5% | | Bank of England Base Rate | 4.25% (June 2026) | The gap between 60% and 85% LTV products is significant — a larger deposit meaningfully reduces your rate. --- ## How Much Can You Borrow? UK lenders use income multiples as the primary affordability test, typically: **Single applicant: 4–4.5× gross annual income** **Joint applicants: 4–4.5× combined gross income** Since 2014, lenders must also conduct a full affordability assessment covering your outgoings and stress-test your ability to repay if rates rise. ### Quick Reference: Borrowing by Income | Annual Income | Max Borrowing (4.5×) | With 10% Deposit → House Price | |---------------|---------------------|--------------------------------| | £30,000 | £135,000 | £150,000 | | £40,000 | £180,000 | £200,000 | | £50,000 | £225,000 | £250,000 | | £60,000 | £270,000 | £300,000 | | £80,000 | £360,000 | £400,000 | | £100,000 | £450,000 | £500,000 | --- ## Monthly Payment Calculation UK mortgage payments use the same amortisation formula as any mortgage: **Monthly payment = P × [r(1+r)ⁿ] ÷ [(1+r)ⁿ − 1]** Where: - P = loan amount - r = monthly interest rate (annual rate ÷ 12) - n = total months (term × 12) ### Worked Example: £250,000 Mortgage, 5-Year Fix at 4.5%, 25-Year Term - r = 4.5% ÷ 12 = 0.375% per month - n = 25 × 12 = 300 months Monthly payment ≈ **£1,389/month** | Loan Amount | 4.0% Rate | 4.5% Rate | 5.0% Rate | |-------------|-----------|-----------|----------| | £150,000 | £791 | £833 | £877 | | £200,000 | £1,055 | £1,111 | £1,169 | | £250,000 | £1,319 | £1,389 | £1,461 | | £300,000 | £1,583 | £1,667 | £1,753 | | £400,000 | £2,111 | £2,222 | £2,338 | *All figures: 25-year repayment term* --- ## Stamp Duty Land Tax (SDLT) — England & Northern Ireland 2026 Stamp Duty is payable on the purchase price. The rates are tiered (you pay each rate only on the portion within that band). ### Standard Residential Rates (from April 2025) | Purchase Price Band | SDLT Rate | |--------------------|-----------| | Up to £125,000 | 0% | | £125,001 – £250,000 | 2% | | £250,001 – £925,000 | 5% | | £925,001 – £1,500,000 | 10% | | Over £1,500,000 | 12% | ### First-Time Buyer Relief | Purchase Price Band | FTB SDLT Rate | |--------------------|---------------| | Up to £300,000 | 0% | | £300,001 – £500,000 | 5% | | Over £500,000 | Standard rates apply (no relief) | ### SDLT Examples **£280,000 purchase (not first-time buyer):** - First £125,000 × 0% = £0 - Next £125,000 × 2% = £2,500 - Remaining £30,000 × 5% = £1,500 - **Total SDLT: £4,000** **£280,000 purchase (first-time buyer):** - First £300,000 × 0% = £0 - **Total SDLT: £0** (entire price under £300,000 threshold) ### Scotland and Wales - **Scotland**: Land and Buildings Transaction Tax (LBTT) — different bands and rates - **Wales**: Land Transaction Tax (LTT) — different bands and rates --- ## Deposit Requirements and LTV UK lenders price risk in LTV bands. Lower LTV = better rate: | Deposit | LTV | Rate Tier | |---------|-----|-----------| | 40%+ | 60% | Best available rates | | 25% | 75% | Good rates | | 15% | 85% | Standard rates | | 10% | 90% | Higher rates | | 5% | 95% | Highest rates, limited lenders | The 60% LTV tier typically offers rates 0.5–0.8% lower than the 85% tier — on a £250,000 mortgage over 25 years, that's approximately £15,000–£25,000 in total interest savings. --- ## Shared Ownership: An Alternative for Affordability Shared Ownership lets you buy a 25–75% share of a property and pay subsidised rent on the remainder. You can "staircase" (buy more shares) over time until you own 100%. **Example: £300,000 property, 40% share** - Mortgage on: £120,000 (your 40% share) - Monthly mortgage (4.5%, 25 years): £667 - Monthly rent (on remaining 60%): ~£450 - Total monthly housing cost: ~**£1,117** - vs. full purchase mortgage on £270,000: ~£1,500/month Shared Ownership has complexities (service charges, lease restrictions, resale rules) — but it's a genuine route into ownership where full purchase is unaffordable. --- ## Related Calculators - [Mortgage Calculator](/category/finance/mortgage-calculator) — full monthly payment and amortisation - [How Much House Can I Afford](/blog/how-much-house-can-i-afford-2026) — affordability using income multiples - [Compound Interest Calculator](/category/finance/compound-interest-calculator) — model your deposit savings growth - [Salary to Hourly Calculator](/blog/salary-to-hourly-calculator-guide-2026) — convert income for affordability maths --- ## Frequently Asked Questions **How much can I borrow for a mortgage in the UK?** Most UK lenders will lend 4–4.5× your gross annual income. On a £50,000 salary, that is typically £200,000–£225,000. Joint applications use combined income. A full affordability assessment also considers your outgoings. **What is the current UK mortgage rate in 2026?** As of mid-2026, 5-year fixed rates at 60% LTV are approximately 4.0–4.4%. At 85% LTV, expect 4.5–5.0%. The Bank of England Base Rate is 4.25%. Rates vary by lender — always compare. **How much is Stamp Duty on a £300,000 house?** For a non-first-time buyer: £125,000 × 0% + £125,000 × 2% + £50,000 × 5% = £0 + £2,500 + £2,500 = £5,000. For a first-time buyer purchasing under £500,000: £0 (full relief up to £300,000 purchase price). **What is the difference between repayment and interest-only mortgages?** A repayment mortgage reduces your balance each month — you own the property outright at the end of the term. An interest-only mortgage has lower monthly payments but you still owe the full balance at the end. Interest-only is rare for residential purchases now and requires a credible repayment strategy.