How Much Will You Owe? Try UKPA’s Interest-Only Mortgage Repayment Calculator 

For many homeowners in the UK, the words “interest-only mortgage” come with a mix of relief and risk. Relief because your monthly payments are lower, you’re only covering the interest on the loan, not the original amount you borrowed. Risk is that, when the loan term ends, the whole debt still needs to be paid off. 

In a housing market where affordability remains a major concern and mortgage rates have been on a bumpy ride since 2022, more people are looking at interest-only mortgages as a short-term fix, or a long-term strategy. But how much will you actually owe over time? What will your monthly payments look like at today’s rates? And most importantly, will you be able to afford the final lump sum? 

That’s where UKPA’s Interest-Only Mortgage Repayment Calculator comes in. It’s a free tool built to give you instant clarity on your mortgage costs—without any sales pitches or fine print. 

Why interest-only? 

An interest-only mortgage is exactly what it sounds like: you only pay the interest on the loan each month. The actual amount you borrowed—called the capital—stays the same. This can significantly reduce your monthly outgoings, especially in the early years of a mortgage when other costs (like renovations or childcare) are eating into your budget. 

Let’s say you borrow £300,000 on an interest-only basis at 5%. You’d be paying £1,250 per month in interest, with no reduction to your loan balance. If you had a repayment mortgage instead, your monthly payment would be higher—around £1,750—but you’d chip away at the debt each month. 

The trade-off? At the end of the mortgage term, say 25 years, you still owe the full £300,000. So you’d need a solid plan to pay it back—either by selling the property, using savings, or switching to a repayment mortgage later on. 

The rise of digital tools 

With so many moving parts—interest rates, term lengths, loan sizes—it can be hard to work out what you’ll really owe over time. And while banks and brokers offer their own calculators, they often come with limited transparency or push you to “book an appointment.” 

UKPA’s Interest-Only Mortgage Repayment Calculator is different. It’s designed for curious homeowners, nervous buyers, and savvy investors who want to plug in their own numbers and see the costs upfront, no strings attached. 

The calculator asks for three things: 

• The loan amount you’re borrowing 
• The interest rate you’re paying 
• The term of the mortgage in years 

From there, it shows your monthly interest-only payment, the total interest you’ll pay over the full term, and—crucially—the final lump sum you’ll still owe at the end. 

It’s clean, quick, and easy to use, whether you’re on your laptop at home or checking it on your phone during a house viewing. 

Why it matters in 2025 

The Bank of England’s base rate in July 2025 is sitting at 4.5%, down slightly from its 2023 peak, but still well above the rock-bottom rates of the 2010s. Mortgage lenders are offering interest-only deals in the 5%–6% range for many borrowers, and that adds up fast. 

For someone with a £400,000 loan at 5.5% over 25 years, the monthly interest-only payment is around £1,833. Over 25 years, that’s £549,900 in interest—on top of the £400,000 you’ll still owe at the end. Without a repayment strategy, it’s like renting from the bank. 

This is why tools like the UKPA calculator are more useful than ever. They let you see the full picture, not just the tempting low monthly payment. You can adjust the term, try out different interest rates, and play with “what if” scenarios. What if rates go up to 6%? What if you shorten the term to 15 years? The calculator tells you instantly. 

Who’s using it? 

Interest-only mortgages aren’t just for landlords or high-income borrowers anymore. While they were once largely restricted to buy-to-let investors, lenders have been slowly reopening the doors to residential borrowers—provided they can show a clear repayment strategy. That could be through investments, ISAs, pensions, or plans to downsize. 

First-time buyers with family support, older homeowners with equity-rich properties, and self-employed workers with fluctuating income are all taking a fresh look at interest-only options. 

But affordability rules are still tight. In most cases, you need a sizeable deposit (often 25% or more) and a robust repayment plan to get approved. That’s why knowing your numbers ahead of time matters more than ever. 

Planning for the future 

If you’re already on an interest-only mortgage or thinking about applying for one, the calculator can also help you plan your exit. It shows how much you’ll owe at the end of the term so that you can work backwards. How much would you need to save each month to pay off the debt? Could your pension or investments cover it? Would selling your home give you enough equity? 

These are tough questions—but ones you need to face early, not when the clock runs out. 

Conclusion 

Interest-only mortgages can offer flexibility, especially in a high-cost, high-rate world like 2025. But they come with strings attached. You’re not reducing your debt, you’re deferring it. That’s why understanding the real costs is essential before signing anything. 

UKPA’s Interest-Only Mortgage Repayment Calculator is a small but powerful tool that helps you take control. Whether you’re buying, remortgaging, or reviewing your finances, it gives you the numbers you need to make informed choices. 

Because when it comes to your biggest financial commitment, guessing isn’t good enough. Check the maths. Run the numbers. Know what you owe.