Interest Only vs Repayment Mortgage Calculator
Enter the loan, the rate and the term. See both monthly payments and the saving you would need to repay an interest only loan.
Growth on savings is only an assumption and is not guaranteed.
Worked examples
£200,000 at 5% for 25 years
Repayment or interest only, 4% growth on savings
£1,169.18 against £833.33 a month
Interest only needs a further £389.01 a month in savings to repay the loan at 4% growth.
About Interest Only vs Repayment Mortgage Calculator
A repayment mortgage pays off some of the loan each month along with the interest, so the debt reaches zero at the end of the term. An interest only mortgage covers just the interest, which makes the payment much lower, but you still owe the whole loan at the end and need another way to repay it, such as savings, investments or selling the property.
Enter the loan, the rate and the term. The page shows the monthly payment for each type, the total you pay over the term and the debt left. To compare fairly, it also works out the monthly saving that would grow to the loan amount at a growth rate you choose, and adds it to the interest only payment. The growth rate is an assumption and is not guaranteed, so use a cautious figure.
How to use Interest Only vs Repayment Mortgage Calculator
- Enter the mortgage amount and the interest rate.
- Enter the term in years.
- Enter a cautious growth rate for savings or investments.
- Compare the two payments, the totals and the saving needed.
Common uses
- Seeing why interest only payments are so much lower
- Planning the saving needed to repay an interest only loan
- Comparing the cost with part and part mortgages
- Checking a buy to let funding plan
Sources
Last reviewed 18 October 2026.
Frequently asked questions
What happens at the end of an interest only mortgage?
You must repay the full loan. If you cannot, you may need to sell the property, remortgage or extend the term, depending on the lender and your circumstances.
Is interest only cheaper?
The monthly payment is lower, but you do not reduce the debt. Once you add the saving to repay the loan at the end, the total monthly cost can be close to a repayment mortgage.
Who can get an interest only mortgage?
Lenders usually require a clear plan to repay the loan, a large deposit or substantial equity, and sufficient income. Buy to let mortgages commonly use interest only.
What growth rate should I use?
A cautious one. Investments can rise or fall, and a plan that relies on high growth may fall short. Try several rates to see the effect.
What is the monthly saving shown?
It is the fixed amount you would add each month, growing at your chosen rate, to build a sum equal to the loan at the end of the term.