Here is a number that shocks every new landlord. On a £150,000 repayment mortgage at 5.5% over 25 years, you will pay roughly £125,400 in interest alone. The total repayment is £275,400 for a £150,000 loan.
Total interest paid is the difference between all your monthly payments and the original loan amount. It answers the question: how much does this mortgage actually cost me?
The formula is simple enough. Multiply your monthly payment by the number of months, then subtract the loan amount. For a 25-year term at £918 a month: £918 times 300 months equals £275,400. Subtract £150,000. The answer is £125,400.
Most landlords do not care about total interest because they plan to sell before the term ends. But you should know the number for two reasons. First, it helps you decide between loan terms. A 20-year term costs more per month but reduces your total interest. A 30-year term costs less per month but adds years of interest payments.
Second, it puts your borrowing into perspective. If your property only goes up in value by £125,000 over 25 years, your mortgage interest has consumed all your capital growth. That is a sobering thought.
The formula
Total Interest = (Monthly Payment × n) - Principal
Why this matters
Total interest paid is the real cost of borrowing. It helps you compare loan terms and decide whether overpayments make sense. A few extra pounds a month now can save thousands later.
If you want to know exactly what a property is worth before you make an offer, Xelox Properties can help. We run the numbers so you do not have to.