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Mortgage Calculator
How much will my mortgage payments be
Enter the mortgage loan, expected interest rate and term of the mortgage and press Calculate.
The calculator will give you an estimate of the repayments for a repayment (capital and interest) mortgage and for an interest only mortgage.
You will note that the interest only payment is lower than the capital and interest. This is because you are just paying the interest back to the lender.
With a capital and interest mortgage, your monthly mortgage payment is paying both the interest and paying a small amount off the capital borrowed. At the end of each year you will notice from your mortgage statement that the capital borrowed has reduced
If you take out an interest only loan for £100,000 (say). You will still owe the lender £100,000 in 25 years time. You should have some means of clearing an interest only mortgage.