What is the monthly repayment on a £150,000 interest-only mortgage at 5%?

A £150,000 interest-only mortgage at 5% costs £625 per month (£150,000 × 5% ÷ 12). The capital balance remains at £150,000 throughout — you must repay the full amount at the end of the term.

Is it better to have a repayment or interest-only mortgage for buy-to-let?

Interest-only gives lower monthly payments (improving cashflow) but the capital balance never reduces. Most BTL investors use interest-only to maximise monthly cashflow and plan to repay via property sale. Lenders typically require rental income to cover 125–145% of the interest-only payment.

How is a mortgage monthly payment calculated?

For a repayment mortgage: monthly payment = P × (r × (1+r)^n) / ((1+r)^n - 1), where P is the loan, r is the monthly rate (annual rate ÷ 12), and n is the number of months. For interest-only: monthly = P × annual_rate ÷ 12.

Mortgage Calculator UK — Monthly Repayments & Interest

Property Value

Deposit

25%

Loan Amount (auto-calculated)

Annual Interest Rate

Mortgage Term

25 years

Repayment Type

Repayment Interest Only

Monthly Payment

£0

Repayment mortgage

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LTV

—

Total Repaid

—

Total Interest

—

Annual Cost—

Rate—

Term—

ICR Check: For BTL lenders require rent to cover 125% of monthly payment. Minimum rent needed: —/mo

Year	Annual Interest	Annual Principal	Balance Remaining
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Mortgage FAQs

What is the monthly payment on a £150,000 interest-only mortgage at 5%?

£150,000 × 5% ÷ 12 = £625 per month. For interest-only, the capital remains unchanged throughout the term — you must repay the full £150,000 at the end.

Interest-only vs repayment — which is better for buy-to-let?

Interest-only gives lower monthly payments (improving cashflow) but the capital never reduces. Most BTL investors use interest-only to maximise cashflow and plan to repay by selling the property or remortgaging. Repayment builds equity over time. Lenders require rental income to cover 125–145% of the interest payment.

How does LTV affect mortgage rates?

Lower LTV (higher deposit) typically means better mortgage rates. A 25% deposit (75% LTV) gives access to the widest range of BTL products. Many lenders cap BTL at 75–80% LTV. Rates typically improve significantly between 80%, 75% and 60% LTV thresholds.

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