Monthly Payment on a £300,000 UK Mortgage

Your monthly payment is £1,842 — and you pay £252,600 in interest

A £300,000 repayment mortgage at 5.5% over 25 years costs approximately £1,842 per month. Over the full term, you will pay £552,600 total. The £252,600 in interest is 84% of the original loan amount.

UK mortgage basics: repayment vs interest-only

Most UK mortgages are repayment (capital + interest), meaning each monthly payment reduces the balance. The alternative — interest-only — charges just the interest each month (£1,375 on £300K at 5.5%) but leaves the full £300,000 due at the end of the term.

Interest-only mortgages were common before 2008 but lenders now require a credible repayment strategy (usually investments or property sale). For this scenario, we use a standard repayment mortgage.

How the payments split over 25 years

Year	Monthly interest	Monthly principal	Balance remaining
1	£1,375	£467	£294,394
5	£1,253	£589	£274,103
10	£1,053	£789	£239,483
15	£791	£1,051	£189,898
20	£450	£1,392	£120,455
25	£8	£1,834	£0

The crossover from interest-heavy to principal-heavy payments happens around year 12. In the first five years, you pay £75,142 in interest and only £35,897 in principal.

UK-specific costs on top of the mortgage

Cost	Estimated monthly
Mortgage P&I	£1,842
Council tax (Band D average)	£175
Buildings insurance	£25–£40
Service charge (if leasehold)	£100–£300
Maintenance (1% of value)	£250
Total housing cost	~£2,392–£2,607

Stamp Duty on a £300,000+ property (assuming not a first-time buyer) adds £2,500 at purchase — a one-off cost, not monthly.

How rates affect a £300K mortgage

UK mortgage rates have been volatile. Here is what different rates mean:

Rate	Monthly payment	Total interest	vs 5.5%
4.0%	£1,584	£175,115	−£258/month
4.5%	£1,668	£200,214	−£174/month
5.0%	£1,754	£226,162	−£88/month
5.5%	£1,842	£252,600	—
6.0%	£1,933	£279,939	+£91/month
6.5%	£2,026	£307,791	+£184/month

Each 0.5% change adjusts the payment by roughly £85–£90/month and costs or saves about £27,000 in total interest.

Overpayments: the UK advantage

Most UK lenders allow overpayments of up to 10% of the outstanding balance per year without early repayment charges. On a £300,000 mortgage, that is up to £30,000/year in extra payments.

Overpayment	Payoff time	Interest saved
£100/month	22 years 3 months	£33,800
£200/month	20 years	£59,100
£500/month	16 years 2 months	£108,300
10% lump sum in year 1	22 years 6 months	~£38,000

£200/month in overpayments cuts 5 years off the mortgage and saves nearly £60,000. This is often the best risk-free “return” available — equivalent to earning 5.5% tax-free on the overpaid amount.

Fixed vs variable: the UK decision

UK mortgages typically offer 2-year or 5-year fixed periods before reverting to the lender’s standard variable rate (SVR), which is usually 2–3% above the fixed rate.

2-year fix at 5.0%: Lower rate now, but you remortgage sooner (with fees of £1,000–£2,000 each time).
5-year fix at 5.5%: Slightly higher rate, but payment certainty for 5 years and fewer remortgaging fees.
Tracker (base rate + margin): Moves with the Bank of England rate. Good if you expect rates to fall.

On a £300,000 mortgage, the 0.5% difference between a 2-year and 5-year fix is about £88/month. Whether to lock in depends on your view of where rates are heading.

Use the Mortgage Payment Calculator to model your specific loan amount, rate, and term.