A mortgage overpayment calculator that shows exactly how much interest you save and how many years earlier your mortgage clears when you pay a fixed amount extra each month. For homeowners deciding whether to overpay, by how much, and whether it beats leaving the money in savings.
How it works
The tool builds two full amortisation schedules and compares them. The contractual monthly payment comes from M = P · r(1+r)ⁿ ⁄ ((1+r)ⁿ − 1), where r is the monthly rate (annual rate ÷ 12 ÷ 100) and n is the remaining months. It then simulates each month twice — once paying just the contractual amount, and once paying that plus your overpayment, which is applied straight to principal. The difference in total interest and in months to clear is your saving.
The effect compounds over time because each extra payment reduces the balance that interest is charged on. Month after month, slightly less interest accrues, so slightly more of each subsequent payment goes to principal — a virtuous cycle that accelerates as the loan matures.
Example and sensitivity table
A £200,000 balance at 4.5% over 25 years has a contractual payment of about £1,112/month:
| Monthly overpayment | Years saved | Interest saved |
|---|---|---|
| £50 | ~1y 8m | ~£9,000 |
| £150 | ~4y 0m | ~£24,000 |
| £300 | ~7y 0m | ~£40,000 |
| £500 | ~10y | ~£55,000 |
Even a modest £50/month makes a meaningful difference over a 25-year term. The savings are non-linear — early overpayments save more than later ones because they have more remaining years to compound.
Overpaying vs. saving: which wins?
The comparison depends on two rates: your mortgage rate and the after-tax return on savings.
- If your mortgage rate is
4.5%and your savings account pays3.0%(after tax), overpaying saves more. - If you have access to an ISA or high-yield savings product that beats your mortgage rate after tax, the savings may come out ahead.
- A pension contribution can beat both if employer matching applies — a 100% employer match is an immediate 100% return that neither mortgage nor savings can match.
The right answer depends on your exact rates, tax situation, and whether you have an emergency fund. This calculator lets you model the mortgage side of the equation; compare it to your savings rate to make the call.
The 10% overpayment limit
Many UK fixed-rate mortgages allow overpayments up to 10% of the outstanding balance per year without an Early Repayment Charge (ERC). Exceed that and the lender may charge a fee — often 1–5% of the amount overpaid. Before committing to a monthly overpayment, confirm:
- Your lender’s exact annual limit (it may be 10% of the original balance rather than the current balance).
- Whether the limit resets on the mortgage anniversary or the calendar year.
- What the ERC fee is if you occasionally go over.
Staying within the free overpayment limit is almost always worthwhile. Paying an ERC reduces or eliminates the interest saving.
Privacy
Nothing you enter leaves your browser. All calculations run locally and nothing is stored or sent to a server.