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Mortgage Overpayment Calculator

See what a regular monthly overpayment could do to your mortgage. Enter your balance, rate, remaining term and an overpayment amount to estimate the interest you could save and how much sooner you could be mortgage free.

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See how a regular monthly overpayment could cut your interest and clear the mortgage sooner.

Why overpaying saves interest

An overpayment reduces the balance straight away, so less interest is charged in every month that follows. Because the saving compounds over the remaining term, even a modest monthly overpayment can remove a surprising amount of interest.

Reducing the term or the payment

Most lenders let you use overpayments to shorten the term while keeping the payment the same, which maximises the interest saved. Some instead reduce your future required payment. This calculator models keeping the payment the same and clearing the mortgage sooner.

Check your overpayment allowance

Many fixed-rate mortgages allow penalty-free overpayments of up to around 10% of the balance each year. Overpaying above that can trigger an early repayment charge, so it is worth checking your mortgage terms first.

Worked examples

£150 a month on a £200,000 mortgage

On a £200,000 balance at 4.5% over 25 years, paying an extra £150 a month can save thousands in interest and take a few years off the term.

Lump sum versus regular overpayment

A one-off lump sum saves interest from the day it is paid, while a regular overpayment builds the saving steadily. Both reduce the balance that interest is charged on.

How we calculate this

The normal monthly payment is calculated from the balance, rate and remaining term using the standard repayment formula.

The calculator then amortises the balance month by month, adding the overpayment to each payment, until the balance reaches zero.

Interest saved is the difference between total interest with and without overpaying. The estimate assumes a fixed rate and does not model early repayment charges.

Official sources

FAQs

Will overpaying always save money?

It saves interest as long as there is no early repayment charge that outweighs the saving. Always check your mortgage allowance before overpaying.

Should I overpay or save instead?

Overpaying is often worthwhile when your mortgage rate is higher than the after-tax rate on your savings. If savings pay more, saving may win.

Does it reduce my monthly payment?

This estimate keeps the payment the same and shortens the term. Some lenders instead lower future payments, so ask which option your lender applies.

Can I stop overpaying later?

Regular overpayments are usually flexible and can be paused, unlike reducing the agreed term, which is a formal change to the mortgage.

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