Mortgage Rate Impact Calculator
Compare two mortgage interest rates to see the difference in monthly payment and total interest paid over the life of the loan.
When a mortgage interest rate rises — due to a fixed-rate term ending, a Bank of England base rate increase, or refinancing — your monthly payment changes. Knowing the new payment helps you budget and plan ahead.
Standard mortgage payment formula: M = P × r(1 + r)ⁿ / ((1 + r)ⁿ − 1)
Where:
- M = monthly payment
- P = remaining loan balance (principal)
- r = monthly interest rate (annual rate / 12)
- n = remaining months on the loan
Worked example: Remaining balance: £200,000 Previous rate: 2.5% → previous monthly payment calculation: r = 0.025/12 = 0.002083, n = 240 months (20 years) M = £200,000 × 0.002083 × (1.002083)²⁴⁰ / ((1.002083)²⁴⁰ − 1) M = £200,000 × 0.002083 × 1.6436 / 0.6436 M = £1,062/month
New rate rises to 5.0%: r = 0.05/12 = 0.004167 M = £200,000 × 0.004167 × (1.004167)²⁴⁰ / ((1.004167)²⁴⁰ − 1) M = £1,320/month
Monthly increase = £258. Annual increase = £3,096.
What to do when your rate rises:
- Overpay if possible before the rate rises — reduces the principal
- Consider fixing for a longer term to lock in current rates
- Compare remortgaging costs vs rate rise cost
- Check if your lender offers rate switching without exit fees
Types of UK mortgages affected:
- Tracker mortgages: rate moves with Bank of England base rate instantly
- SVR (Standard Variable Rate): lender’s discretion, usually rises with base rate
- Fixed-rate: protected until fix period ends, then reverts to SVR
How we build and check this calculator
This calculator runs entirely in your browser, so the numbers you enter stay on your device. The math behind it is written by hand and tested against worked examples and standard references before the page goes live.
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