Mortgage overpayment calculator
See how a one-off or recurring overpayment could reduce your mortgage term and interest.
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See how a one-off or recurring overpayment could reduce your mortgage term and interest.
When you overpay your mortgage, the extra money goes directly toward reducing your outstanding balance. Because interest is calculated on the remaining balance, a lower balance means less interest each month. This creates a compounding effect — every overpayment saves you more than its face value over the life of the loan.
You can overpay as a one-off lump sum (for example, from a bonus or inheritance) or as a regular monthly or annual extra payment. Both approaches work, and you can combine them. The earlier you overpay, the greater the long-term impact, because the interest savings compound over more years.
Most fixed-rate mortgage deals include an early repayment charge (ERC) if you overpay more than a certain amount — typically 10% of the outstanding balance per year. If you exceed this limit during your fixed period, you may be charged 1–5% of the overpayment amount.
Check your mortgage terms before making large overpayments. Once your fixed deal ends and you move to the lender’s standard variable rate, ERCs usually no longer apply and you can overpay without limit.
When you have spare cash, overpaying your mortgage is one option among several — you could also save, invest, or pay down other debts. The right choice depends on your interest rates, tax situation, risk tolerance, and personal circumstances.
This calculator shows the interest savings from overpaying your mortgage. To understand how it fits into your wider financial picture, consider speaking to a qualified financial adviser.
When you overpay, most lenders reduce your term but keep your monthly payment the same. This means you pay off your mortgage sooner and save the most interest overall. Some lenders let you choose to reduce your monthly payment instead, which frees up cash flow but saves less interest in total.
This calculator models the term-reduction approach, which is the most common and usually the better financial outcome. If flexibility matters more to you than total interest saved, ask your lender about payment reduction.
Need to estimate your base mortgage payment first? Use our mortgage calculator. Buying a new property? The stamp duty calculator estimates your SDLT costs. Considering investing instead of overpaying? The ISA calculator projects how your money could grow tax-free.
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