How to use the Mortgage Overpayment Calculator
- 1 Enter your mortgage balance, rate and years left.
- 2 Enter the extra amount you could pay each month.
- 3 Optionally enter a lump sum to pay now.
- 4 Read the interest saved and how much sooner you finish.
Worked example
A £200,000 mortgage at 4.5% with 25 years left. The normal payment is about £1,112 a month. Overpaying £200 a month saves about £36,280 of interest and clears the mortgage about six years sooner, in 18 years and 11 months.
Features
Interest saved
Total interest with and without overpayments.
New term
Years and months until you are mortgage-free.
Lump sum option
See the effect of a one-off payment.
10% check
Overpayments as a share of your balance.
When to use it
Spare cash
Decide between overpaying and saving.
Pay rises
Put part of a pay rise towards the mortgage.
Bonuses
Use a bonus as a lump sum overpayment.
Before retirement
Plan to be mortgage-free sooner.
Frequently asked questions
Can I overpay my mortgage?
Most deals let you overpay up to 10% of the balance each year without a charge. Above that, an early repayment charge may apply during a fixed or discounted deal.
Is overpaying better than saving?
If your mortgage rate is higher than the after-tax rate on savings, overpaying usually saves more. Keep an emergency fund first, as overpayments can be hard to get back.
Should I reduce my term or my payment?
Many lenders reduce your monthly payment after an overpayment unless you ask them to keep it the same and shorten the term. Keeping payments the same saves more interest.
Do overpayments reduce my loan-to-value?
Yes. A lower balance can move you into a cheaper LTV band when you remortgage.
Can I take overpayments back?
Some lenders offer payment holidays or allow you to borrow back overpayments, but many do not. Check before overpaying.
What about an offset mortgage?
An offset mortgage uses your savings to reduce the interest charged, while you keep access to the money.
Should I overpay or pay into a pension?
Pension contributions get tax relief and often employer contributions, which may beat the interest saved. It depends on your rates and circumstances.
How do I make an overpayment?
Contact your lender or use their online service. Regular overpayments can usually be added to your direct debit.
Do overpayments help when rates are high?
Yes. The higher your rate, the more interest each extra pound saves.
Does the calculator include fees?
No. Check your mortgage offer for any early repayment charges on overpayments above the allowance.
Results are estimates based on the official rates linked above. Confirm important figures with the issuing authority or a qualified adviser before you act on them.
Reviewed by ToolsUnlocked Team · Last updated