🔁 Mortgage Revision Calculator
Variable rateFor index-plus-margin mortgages: Euribor in the eurozone, the Bank of England base rate for UK trackers. Enter whichever index your contract names.
A variable or tracker mortgage is repriced periodically against an index such as Euribor, plus a fixed margin agreed when you signed. This works out what the payment becomes at the new rate, how much it changes, and what it adds over the rest of the term.
What happens to your payment when the index moves
A variable or tracker mortgage is priced as an index plus a margin. The index moves with the market; the margin was agreed when you signed and does not change. At each revision — usually every six or twelve months — the lender takes the index value for a specified month, adds your margin, and recalculates the payment over whatever term is left.
Rate = index + margin · Payment = B × r / [ 1 − (1+r)−n ]
B is the outstanding balance, r the new monthly rate and n the months remaining. Note that the recalculation uses the balance you still owe and the term you have left, not the original figures, which is why the same rate rise hits two borrowers very differently depending on where they are in the loan.
Why the payment moves more than the rate
A rate rising from 3.4% to 4.1% is an increase of 0.7 percentage points, which sounds modest. On a €180,000 balance with 22 years left it raises the payment from 969 to 1,036, about 6.9% more, and adds roughly €17,600 over the remaining term. The reason is that the new rate applies to the entire outstanding balance, every month, for every month that is left.
| Index | Rate | Monthly | Change |
|---|---|---|---|
| 0.00% | 0.90% | €752 | — |
| 1.00% | 1.90% | €835 | +€83 |
| 2.50% | 3.40% | €969 | +€217 |
| 3.20% | 4.10% | €1,036 | +€284 |
| 4.00% | 4.90% | €1,115 | +€364 |
The steps are not equal: each additional point of rate costs a little more than the last, because interest compounds across the remaining term. This is also why the same movement is far more painful early in a mortgage than late — the balance it applies to is larger and there are more months for it to apply to.
Where you are in the term changes everything
Two borrowers with identical mortgages face the same rate rise very differently. One with 25 years left sees a large payment increase, because almost the whole balance is still outstanding and will be charged the new rate for a quarter of a century. One with 4 years left sees a small increase, because the balance is low and the remaining period short — their payment is mostly principal by this stage, and principal does not care about the rate.
The amortization calculator shows how that split shifts over the life of a loan, and it explains why a rate shock in year three is a household emergency while the same shock in year twenty is an annoyance.
Check which month's index figure your contract specifies. Most variable mortgages fix on a named month — the figure published for, say, the month before the revision date — not on the value the day your revision happens. If rates have moved recently, the rate you are given may already be several weeks out of date, in either direction.
Rate floors
Some contracts include a floor: a minimum rate below which your payment will not fall however low the index goes. During the years when Euribor was negative, floor clauses meant many borrowers saw none of the benefit, and in several countries they were challenged in court on the grounds that they had not been clearly disclosed when the mortgage was signed. Spanish courts in particular ordered substantial refunds.
If your mortgage has a floor, enter it above and the calculator will apply it. If the floor is binding, further falls in the index change nothing for you, which is worth knowing before you budget around an expected cut.
Payment shock, and what to do before it arrives
The revision is announced before it takes effect, which gives you a window. Three things are worth doing in it. Check the arithmetic yourself, because index-plus-margin is simple enough to verify and errors do happen. Check whether the new payment still fits your budget with a margin, using the budget calculator. And if the answer is uncomfortable, talk to the lender before the first higher payment rather than after a missed one.
The options usually available are extending the term, which lowers the payment and raises the total cost; switching to a fixed rate, which buys certainty at a premium; or overpaying while rates are low to reduce the balance that a future rise would apply to. Whether switching to a fixed rate is worth it depends on the costs involved — the refinance calculator works out the break-even.
Which index, and does it matter
Euribor is the reference for most variable mortgages in the eurozone, typically the 12-month figure. UK trackers follow the Bank of England base rate; some older loans track SONIA or a lender's own standard variable rate, which is not an index at all but a number the lender chooses. That last category is the one to watch: a rate your lender sets at its own discretion can move in ways no published index would.
The arithmetic on this page works for any of them. Put in the old and new values of whatever your contract tracks, add your margin, and the payment calculation is identical.
A worked example
A borrower owes €180,000 with 22 years left, on a mortgage of Euribor plus 0.90%. The last revision used an index of 2.50%, giving a rate of 3.40% and a payment of €969.24. This year's revision uses 3.20%, so the rate becomes 4.10% and the payment €1,036.02 — €66.78 more a month, €801 more a year, and €17,630 more over the remaining term. Overpaying €100 a month from now would clear the loan about two years early and claw back most of what the revision cost.
Most people arrive here on the way to something else, so it is worth knowing the mortgage calculator, which handles the next part, and the amortization calculator, which covers the case just beyond.
Frequently Asked Questions (FAQs)
How is a mortgage revision calculated?
The lender takes the index value for the month your contract specifies, adds your fixed margin, and recalculates the payment over the balance you still owe and the term you have left. The margin never changes; only the index does.
Why did my payment rise more than the rate did?
Because the new rate applies to the whole outstanding balance for every remaining month. A 0.7 point rise on a €180,000 balance with 22 years left raises the payment by about 6.9%, since the increase compounds across the full remaining term.
What is a differential or margin?
The fixed percentage added to the index, agreed when you signed and unchanged for the life of the loan. A mortgage described as Euribor plus 0.90% has a margin of 0.90 points, so if Euribor is 3.20% your rate is 4.10%.
Which Euribor figure will my lender use?
Whichever your contract names, most often the 12-month figure published for a specific month before the revision date. It is rarely the value on the day itself, so check the contract rather than the current headline rate.
What is a floor clause?
A contractual minimum rate below which your payment will not fall, however far the index drops. They became contentious when Euribor turned negative and many borrowers saw no benefit; courts in several countries ordered refunds where the clause had not been clearly explained at signing.
Can I avoid the increase?
Not the increase itself, but you can change what it applies to. Extending the term lowers the payment and raises total cost; switching to a fixed rate buys certainty at a price; overpaying reduces the balance that future rises will be charged on. Speak to the lender before the first higher payment, not after.
Does this work for UK trackers?
Yes. The arithmetic is the same for any index-plus-margin loan — enter the old and new base rate instead of Euribor. Be careful with a standard variable rate, which is set at the lender's discretion rather than following a published index.