Mortgage Repayment Calculator P&n
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Reviewed by Calculator Editorial Team
This mortgage repayment calculator helps you determine your monthly payments when taking out a mortgage using the Price and Interest (P&N) method. The P&N method is one of the most common repayment structures in the UK, where both principal and interest are paid each month.
What is a P&N Mortgage?
A Price and Interest (P&N) mortgage is a type of repayment mortgage where both the interest and the principal are paid each month. This is different from interest-only mortgages where only the interest is paid initially.
The P&N method provides a fixed monthly payment that includes both interest and principal. Over time, the amount of principal paid increases while the interest portion decreases as the loan balance is reduced.
P&N mortgages are common in the UK and provide borrowers with predictable monthly payments. The fixed rate period typically lasts 2-5 years, after which the rate may change.
How a P&N Mortgage Works
When you take out a P&N mortgage, your lender calculates your monthly repayment based on:
- The loan amount (mortgage amount)
- The interest rate
- The loan term (repayment period)
The calculation uses the standard mortgage formula:
Monthly Payment = P × [r(1 + r)^n] / [(1 + r)^n - 1]
Where:
- P = Principal loan amount
- r = Monthly interest rate (annual rate divided by 12)
- n = Number of payments (loan term in months)
This formula calculates the fixed monthly payment that will fully repay the loan over the term. The payment includes both principal and interest.
Amortization Schedule
An amortization schedule shows how much of each payment goes toward principal and how much goes toward interest over time. This helps you understand how quickly you'll pay off your mortgage.
| Month | Payment | Principal | Interest | Balance |
|---|---|---|---|---|
| 1 | $1,200 | $800 | $400 | $92,000 |
| 2 | $1,200 | $840 | $360 | $91,160 |
| 3 | $1,200 | $880 | $320 | $90,280 |
How to Use This Calculator
- Enter the mortgage amount (loan amount)
- Enter the annual interest rate
- Select the loan term in years
- Click "Calculate" to see your monthly payment
- Review the amortization schedule and payment breakdown
This calculator assumes a fixed interest rate for the entire loan term. For variable rate mortgages, the interest rate may change over time.
Example Calculation
Let's calculate a monthly payment for a £100,000 mortgage at 3.5% interest over 25 years.
Monthly Payment = £100,000 × [0.002917(1 + 0.002917)^300] / [(1 + 0.002917)^300 - 1]
Monthly Payment ≈ £539.28
This means you would pay approximately £539.28 per month to repay the mortgage over 25 years.
Frequently Asked Questions
What is the difference between P&N and interest-only mortgages?
P&N mortgages pay both principal and interest each month, while interest-only mortgages only pay interest initially. P&N mortgages provide predictable monthly payments and fully repay the loan over time.
How is the monthly payment calculated?
The monthly payment is calculated using the standard mortgage formula that accounts for the principal, interest rate, and loan term. The payment is fixed for the duration of the loan.
Can I get a P&N mortgage with a variable rate?
Yes, some lenders offer P&N mortgages with variable rates. The interest rate may change over time, which could affect your monthly payments.
What happens if I want to repay my mortgage early?
Early repayment options vary by lender. Some allow you to pay off the mortgage early without penalties, while others may charge fees. Check your mortgage agreement for details.