Mortgage Overpayment Calculator
See how many years sooner you could clear your mortgage and exactly how much interest you would save by making a monthly overpayment.
Enter your loan amount, annual interest rate, and mortgage term — the same figures as your current mortgage. Then enter the monthly overpayment you are considering (or already making).
The calculator runs your schedule twice — once with no overpayment (your baseline) and once with the overpayment — then compares the two. The result tells you exactly how many years and months sooner you could be mortgage-free, and the total interest saving.
If you haven't decided on an overpayment amount yet, try different figures to find the trade-off that suits your budget. If you don't know your current outstanding loan balance, you can easily calculate it using our standalone Mortgage Balance Calculator before running your overpayment calculations.
Mortgage interest is charged on the outstanding balance — so every pound you repay early saves you the interest that would have been charged on that pound for every remaining month. The earlier in the term you overpay, the greater the compounding effect. This is why even a modest mortgage overpayment made consistently can save tens of thousands over a 25-year term. To contrast this against traditional structures that keep standard terms intact, explore our Mortgage Repayment Calculator.
Most fixed-rate and discounted-rate UK mortgages allow overpayments of up to 10% of the outstanding balance per year without an early repayment charge (ERC). Exceeding this limit during an introductory rate period typically triggers a penalty — usually 1–5% of the overpaid amount. Always check your mortgage terms or speak to your lender before making a large overpayment.
Once you move to a standard variable rate (SVR), most lenders impose no overpayment limit. If you want to keep your extra capital fully liquid instead of sinking it permanently into your loan equity, an alternative framework worth analyzing is available on our Offset Mortgage Calculator.
The guaranteed saving from overpaying equals your mortgage interest rate. If your rate is 5%, overpaying gives you a 5% risk-free return. To beat that in investments after tax, you'd need a consistent after-tax return above 5% — which is possible in a Stocks & Shares ISA over the long run, but not guaranteed. Many people choose a hybrid approach: overpay enough to stay within the ERC-free limit, and invest the rest.
To evaluate how early payments structurally alter your long-term interest curve month-by-month, check out our full Mortgage Amortization Calculator or isolate your absolute interest expense metrics directly via the dedicated Mortgage Interest Calculator.
The savings depend on your loan size, interest rate, remaining term, and overpayment amount. As a rough example: overpaying £200/month on a £200,000 mortgage at 5% over 25 years saves around £30,000 in interest and clears the mortgage roughly 5 years earlier. Use this calculator with your own figures for an exact answer.
Most UK fixed-rate and tracker mortgages allow overpayments of up to 10% of the outstanding balance per year without an early repayment charge (ERC). Overpaying more than this during a fixed or introductory rate period typically triggers an ERC — check your mortgage terms before overpaying. Variable rate mortgages often have no overpayment limit.
It depends on what you ask your lender to do. Most lenders default to reducing the remaining term (so your payment stays the same but you finish sooner). Some allow you to recalculate the payment downward instead. Reducing the term saves the most interest; reducing the payment improves monthly cashflow. This calculator models the term-reduction approach.
Earlier is better — interest is charged on the outstanding balance, so reducing the balance early in the term has a compounding effect. An overpayment in year 1 saves more total interest than the same overpayment in year 10, because you avoid interest on that principal for a longer remaining period.
If your mortgage rate is higher than the after-tax return you could earn on investments, overpaying is usually the better option. If your rate is low and you expect higher investment returns (e.g. in a Stocks & Shares ISA), investing may come out ahead. Consider also that overpaying provides a guaranteed, risk-free saving equal to your mortgage rate, while investment returns are uncertain.