Interest-Only vs Repayment Calculator
Compare interest-only and capital-and-interest mortgages side by side - the monthly cost, total interest, capital still owed at the end and your projected equity after property growth.
Compare the two repayment methods
| Metric | Interest-Only | Capital & Interest |
|---|---|---|
| Monthly payment | £1,108.33 | £1,596.33 |
| Total interest over term | £332,500 | £198,899 |
| Capital owed at end | £280,000 still owed | £0 (fully repaid) |
| Projected property value | £586,258 | £586,258 |
| Net equity at end | £306,258 | £586,258 |
Interest-only saves £488.00/month (£5,856/year) versus capital and interest. But you pay £133,601 more in total interest over 25 years and still owe £280,000 at the end, versus owning the property outright on repayment. Based on 3.0% annual growth, your net equity after 25 years would be £306,258 (interest-only) vs £586,258 (repayment).
An estimate only. Property growth is illustrative, not guaranteed, and your actual payment depends on the lender's rate, fees and how interest is charged.
Which should you choose?
Interest-only keeps your monthly payments as low as possible, because you only ever cover the interest and never touch the balance. The trade-off is that the full loan remains outstanding at the end of the term, so you need a credible repayment vehicle - savings, investments, the sale of another asset or downsizing - to clear it. Lenders restrict interest-only lending and will want to see that plan before they agree to it.
A capital-and-interest (repayment) mortgage costs more each month, but every payment chips away at the balance, so you are guaranteed to own the home outright at the end of the term. It is the simpler, lower-risk route for most residential borrowers, while interest-only often suits landlords and those with a clear, separate plan to repay the capital.
Get a personalised quote
THINK CAREFULLY BEFORE SECURING OTHER DEBTS AGAINST YOUR PROPERTY. YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE. IF YOU ARE THINKING OF CONSOLIDATING EXISTING BORROWING YOU SHOULD BE AWARE THAT YOU MAY BE EXTENDING THE TERMS OF THE DEBT AND INCREASING THE TOTAL AMOUNT YOU REPAY. This information is for general guidance only and does not constitute financial advice or a mortgage offer. Your home may be repossessed if you do not keep up repayments on a mortgage or any other debt secured on it. Doulton Bridging Finance is a trading style of Doulton Money Ltd. We work with FCA-authorised partners to source mortgage finance from a panel of specialist lenders.