How much a mortgage really costs over 25 years, with a calculator

Borrow £250,000 on a UK repayment mortgage at 5% over 25 years and you pay £1,461.48 a month. After 300 payments you’ve paid back £438,443, and £188,443 of that is interest. The interest is what the loan really costs you.

This guide follows the HanaHow episode. It covers where each payment goes, what affects your rate, what happens when a fixed deal ends, the fees, overpaying and how it works in the US. The calculator further down works out the payment, the interest, overpayments and a new rate for your own numbers, in pounds or dollars. It’s general, not about your situation, and the figures are as of 18 October 2026.

£250,000 over 25 years at 5%

5% is close to the Bank of England’s typical five-year fix for September 2026, which was 4.98% at 75% loan to value. On that rate:

• The monthly payment is £1,461.48.
• Over 300 payments you pay back £438,443.
• £188,443 of that is interest, about three quarters of what you borrowed.

These use the usual monthly sum: the yearly rate divided by 12, charged on what you still owe. Many UK lenders work interest out daily, which usually changes the monthly payment by less than a pound and the total interest by up to a few hundred pounds.

Where each payment goes

Each payment is part interest and part principal, the part that pays off the loan. The principal becomes your share of the house. The interest doesn’t, and at the start it’s most of what you pay.

• In month one, £1,041.67 of the £1,461.48 is interest. Only £419.81 comes off the loan.
• Each month the balance falls a little, so the interest does too. By the end of year 9 you’ve paid half of all the interest.
• The principal part doesn’t overtake the interest until payment 135, in year 12.
• After five years you’ve paid £87,689, and you still owe £221,450.

How your deposit affects the rate

Loan to value (LTV) is how much of the home’s value you borrow. A bigger deposit means a lower LTV, and lenders charge less for it.

The Bank of England’s figures for September 2026:

• A typical two-year fix was 5.13% at 75% LTV.
• At 90% LTV it was 5.37%.

These are averages of the rates lenders advertise. Moneyfacts, which tracks deals across all deposit sizes, put both its average two-year and five-year fixes just under 6% in mid-October.

A point on the rate is real money. At 6% instead of 5%, the same £250,000 costs £1,610.75 a month, £149.27 more, and £44,783 more in interest over the term.

When your fix ends

In the UK you rarely keep one rate for 25 years. Most fixed deals last two or five years. When yours ends you move to the lender’s revert rate, its standard variable rate, unless you switch to a new deal.

The Bank of England put the typical revert rate at 6.58% in September 2026. On our loan:

• After a five-year fix you’d owe £221,450. At 6.58% over the 20 years left, the payment goes up to £1,661.52, £200.04 a month more.
• After a two-year fix you’d owe £239,427, and the payment would be £1,685.47, £223.99 more.

So every few years you choose again, and nobody knows what rates will be when you do.

What happened in 2022

The mini-budget on 23 September 2022 rattled the markets, and lenders pulled deals overnight. Moneyfacts’ count of mortgage products fell by 935 between 27 and 28 September, and it still calls that the biggest single-day fall on its records.

The Bank of England’s typical two-year fix at 75% LTV went:

• from 4.17% in September 2022 to 5.99% in October. On our loan, that’s £1,343.17 a month rising to £1,609.23, £266.06 more.
• back down to 4.60% by April 2023.
• up to 6.22% by July 2023, as the Bank kept raising Bank Rate, which reached 5.25% that August.
• under 4% by January 2026, at 3.93%.
• back between 4.79% and 5.14% from April to September 2026.

Is 5% high?

Since January 1995 the Bank of England’s typical two-year fix at 75% LTV has averaged 4.28%. That’s an average of very different years, not a forecast:

• From 1995 to September 2008 it averaged 5.95%, with a high of 8.38% in February 1995.
• From 2009 to 2021 it averaged 2.41%, with a low of 1.20% in September 2021.

So today’s rates look high next to the cheap money after the 2008 crash, and ordinary next to the years before it.

Fees and early repayment charges

Many deals charge an arrangement fee, and some brokers charge a fee too. Money Saving Expert says to expect an arrangement fee of at least £1,000 for the lowest rates. Take a £999 fee:

• Paid over a two-year fix, it adds about £41.63 a month to the cost of the deal.
• Added to the loan instead, it costs £5.84 a month for 25 years, and £753 in interest on top of the fee.

Leave a fix early and you’ll usually pay an early repayment charge. Money Saving Expert says it can be up to 5% of what you owe, and gives a five-year fix charging 5%, 4% and then 3% in its first three years. In year three our loan’s balance falls from £239,427 to £233,731, so 3% is about £7,000.

Overpaying

Overpaying cuts the interest, because it brings the balance down sooner. Money Saving Expert says fixed-rate mortgages typically let you overpay up to 10% of the balance each year without a charge. Go over your deal’s limit and you could be charged, usually an early repayment charge.

On our loan, overpaying each month and keeping the payment the same:

Extra each month	Cleared after	Early by	Interest saved
£100	22 years 1 month	2 years 11 months	£25,382
£200	19 years 10 months	5 years 2 months	£44,432
£500	15 years 3 months	9 years 9 months	£81,204

£200 a month is £2,400 a year, about 1% of the balance, so it’s well inside a 10% limit.

What you save is a guaranteed return at your mortgage rate, 5% here. Investing the same money might beat that over the long run, or it might not. Some lenders lower your payment after an overpayment instead of shortening the term, so ask yours which it does.

Longer terms and interest only

Stretching the term lowers the payment and raises the cost:

Term	Monthly payment	Interest
25 years	£1,461.48	£188,443
30 years	£1,342.05	£233,139
35 years	£1,261.72	£279,922
40 years	£1,205.49	£328,636

Thirty-five years instead of 25 cuts the payment by about £200 a month and adds £91,479 in interest.

With interest only, you pay just the interest: £1,041.67 a month on our loan. After 25 years you’ve paid £312,500 and you still owe the full £250,000, which you then have to repay some other way, such as from savings or investments or by selling.

Mortgage calculator

Put in your loan, rate and term, and an overpayment if you’d make one. The side-by-side part shows what a different rate does: from year 6 shows a five-year fix ending, and from year 1 compares two rates for the whole term. Switch it to the US for dollars.

Buying costs

In England and Northern Ireland, stamp duty on a £300,000 home is:

• nothing for a first-time buyer, who pays 0% up to £300,000 and 5% from there to £500,000.
• £5,000 if you’ve owned a home before: 0% up to £125,000, 2% to £250,000 and 5% to £925,000.
• £20,000 if it’s a second home, with 5% more on every band.

Scotland has Land and Buildings Transaction Tax and Wales has Land Transaction Tax, with their own bands. The stamp duty calculator works out all three. You’ll also pay a solicitor or conveyancer, and usually a survey.

In the US

The US works differently. The most common loan is a 30-year fixed rate: Freddie Mac says it’s the choice of nearly 90% of homebuyers. The rate is fixed for the whole term, so there’s no deal ending every few years. If rates fall you can refinance to a new loan, though that has its own closing costs.

Freddie Mac’s average 30-year rate was 7.40% on 15 October 2026. On a $400,000 loan:

• The payment is $2,769.52 a month.
• Over 30 years you pay $597,027 in interest, more than the loan.
• In month one, $2,466.67 of the payment is interest.
• The principal part doesn’t overtake the interest until after 20 years and 8 months.

PMI, closing costs and escrow

• Private mortgage insurance. On a conventional loan with less than 20% down you’ll usually pay PMI. Freddie Mac says it costs about $30 to $70 a month for every $100,000 borrowed, so $120 to $280 a month on $400,000. It protects the lender. It ends automatically when your balance is scheduled to reach 78% of the home’s original value, if you’re up to date with payments, and the CFPB says you can ask to cancel it once your balance reaches 80% of the original value, sooner if you’ve paid extra, as long as you’ve kept up with payments.
• Closing costs. Freddie Mac puts them at about 2% to 5% of the purchase price.
• Points. You can pay points up front to lower the rate. One point is 1% of the loan, $4,000 on $400,000.
• Escrow. Property tax and home insurance are often collected with your payment through an escrow account, so the monthly bill is bigger than the mortgage.

A 15-year loan, or paying the 30 like a 15

Freddie Mac’s average 15-year rate was 6.71% on the same day.

• A 15-year loan at 6.71% costs $3,530.77 a month, $761.25 more than the 30-year, every month. It saves $361,488 in interest.
• Paying the 30-year loan like a 15 takes $3,685.36 a month at 7.40%. That’s $154.59 a month more than the 15-year loan, but if money gets tight you can drop back to the normal $2,769.52.

Some US lenders charge a prepayment penalty if you pay off all or part of the loan early, so check yours before you overpay.

The US benchmark

Since April 1971, Freddie Mac’s weekly 30-year rate has averaged about 7.7%. It peaked at 18.63% in October 1981 and fell to 2.65% in January 2021. The 15 October reading of 7.40% is just below that long-run average.

Risks and assumptions

This is general, not about your situation. The figures are as of 18 October 2026, and rates change every week. The worked examples assume a fixed rate for the term unless they say otherwise, monthly interest at the yearly rate divided by 12 and no fees. Your lender’s figures will differ a little.

Sources

• Bank of England database: quoted rates IUMBV34 (two-year fix, 75% LTV), IUMBV42 (five-year fix, 75% LTV), IUMB482 (two-year fix, 90% LTV), IUMTLMV (revert-to rate) and Bank Rate, to September 2026, and how the quoted rates are worked out
• Average rates continue to hover just below 6%, Mortgage Strategy, on Moneyfacts’ October figures
• Mortgage products pulled after the mini-budget, LBC, on Moneyfacts’ count for 27 and 28 September 2022, and Average mortgage rates fly over 5% as market adjusts, Moneyfacts, 11 March 2026
• Mortgage overpayment calculator and remortgage fees, Money Saving Expert
• Should you pay off your mortgage early?, MoneyHelper
• Stamp Duty Land Tax: residential property rates, GOV.UK
• Primary Mortgage Market Survey, Freddie Mac, weekly since April 1971
• Finding the right loan, breaking down PMI and upfront homebuying costs, Freddie Mac
• When can I remove PMI?, discount points, escrow accounts and prepayment penalties, Consumer Financial Protection Bureau