What a repayment mortgage actually does
On a standard repayment mortgage, every monthly payment is split in two: part pays the interest owed that month, and part pays down the loan itself. Early on, most of your payment covers interest; as the balance falls, the split flips and more of your money goes to the capital. If you keep paying for the full term, the loan reaches zero at the end — that is why the term matters as much as the rate.
How much a mortgage costs each month
The table below shows the monthly repayment and total interest for different loan sizes at a 5% annual rate over 25 years — a common reference point for UK buyers. These are for a repayment mortgage with the rate held constant for the whole term; most real mortgages only fix the rate for 2–5 years before it changes.
| Mortgage amount | Monthly repayment | Total paid | Of which interest |
|---|---|---|---|
| £150,000 | £877 | £263,066 | £113,066 |
| £200,000 | £1,169 | £350,754 | £150,754 |
| £250,000 | £1,461 | £438,443 | £188,443 |
| £300,000 | £1,754 | £526,131 | £226,131 |
MoneyHelper — How mortgages work · 5% p.a. illustrative, 25-year term, repayment basis
The interest rate matters more than you think
A small change in the rate has an outsized effect over 25 years. On a £250,000 mortgage, borrowing at 3% instead of 6% cuts the monthly payment by roughly £425 and saves about £128,000 of interest over the term:
| Interest rate | Monthly repayment | Total interest |
|---|---|---|
| 3% | £1,186 | £105,658 |
| 4% | £1,320 | £145,878 |
| 5% | £1,461 | £188,443 |
| 6% | £1,611 | £233,226 |
That is why the rate you secure matters so much — a 0.5% difference on a £250,000 mortgage is roughly £20,000–£25,000 of extra interest over a 25-year term.
How the term changes the cost
Stretching the term lowers the monthly payment but adds years of interest. On £250,000 at 5%:
| Term | Monthly repayment | Total interest |
|---|---|---|
| 15 years | £1,977 | £105,857 |
| 20 years | £1,650 | £145,973 |
| 25 years | £1,461 | £188,443 |
| 30 years | £1,342 | £233,139 |
Going from 30 years down to 20 years raises the payment by about £308 a month but saves roughly £87,000 of interest. The right term balances an affordable payment against how much interest you are willing to pay over your lifetime.
Repayment vs interest-only
With an interest-only mortgage you pay only the interest each month, so the loan never shrinks unless you have a separate repayment vehicle — the payment is much lower, but you must repay the full capital at the end. Interest-only is common for some buy-to-let and specialist cases, but for most homebuyers a repayment mortgage is the safer default. The Casvia mortgage calculator supports both so you can compare them directly.
Deposits, LTV and overpaying
Your deposit sets your loan-to-value (LTV) — the loan as a percentage of the property price. Smaller deposits (higher LTV) usually mean higher rates, which is why a bigger deposit can lower both your payment and your total interest. Stamp Duty is charged on the full purchase price regardless of deposit — see the Stamp Duty guide for what you will owe.
If you overpay a repayment mortgage, the extra goes straight off the capital, cutting both your term and your total interest. Most lenders let you overpay up to 10% a year without an early-repayment charge.
MoneyHelper — How to pay off your mortgage faster · overpayment allowances