Formatting only — no exchange-rate conversion is applied.
This varies by lender and is not universal — check your mortgage terms.
The highlighted card shows the strongest result in this comparison. This does not mean it is the right choice for every reader — personal circumstances and lender rules vary.
See what different extra monthly amounts could do. Click a card to apply it to the main calculator.
| Year | Balance (no overpay) | Balance (with overpay) | Cumulative interest saved |
|---|---|---|---|
| Enter your mortgage details above to see the year-by-year breakdown. | |||
This is a simplified maths comparison, not financial advice. It does not factor in tax, inflation, or changing rates.
| Month | Payment | Interest | Principal | Overpayment | Balance |
|---|---|---|---|---|---|
| Enter your mortgage details above to see the amortization schedule. | |||||
What Is a Mortgage Overpayment?
A mortgage overpayment is any amount you pay above your required monthly payment. Overpaying reduces your outstanding balance faster, which means less interest accrues over the life of the loan and you can become mortgage-free sooner. Most lenders allow a certain percentage of the balance to be overpaid each year without penalty, but the exact rules — including any early repayment charge (ERC) — vary by product and lender.
How to Use This Calculator
- Enter your current mortgage balance, interest rate, and remaining term.
- Choose whether the calculator should work out your monthly payment automatically or use your actual figure.
- Add any regular monthly overpayment, one-off lump sum, or annual extra payment you are considering.
- Set your lender’s overpayment allowance and, if applicable, turn on the ERC check.
- Review the results, strategy comparison, and balance timeline to see the potential impact.
How the Calculator Works
This tool runs a month-by-month simulation of your mortgage. Each month it calculates the interest on the remaining balance, deducts your payment and any overpayments, and updates the balance. This approach is necessary because overpayments change the balance dynamically, so a single standard amortisation formula cannot produce an accurate result on its own.
The standard amortisation formula used to estimate the baseline payment is:
M = P × r × (1 + r)^n / ((1 + r)^n − 1)
Where M is the monthly payment, P is the principal, r is the monthly interest rate, and n is the total number of payments. Once the baseline payment is known, the calculator simulates each month individually to handle overpayments and their timing correctly.
Worked Example
Suppose you owe £250,000 at 5.00% over 24 years and 8 months. Your standard monthly payment is roughly £1,460. If you overpay by £100 each month, you could save around £22,000 in interest and clear the mortgage roughly 2 years earlier. A £5,000 lump sum paid immediately could save a further £8,000–£10,000 depending on when it is applied. The calculator shows these effects side by side so you can compare them before committing to a plan.
Overpayment Allowances Vary by Lender
The default allowance in this calculator is 10% of the balance per year, but this is only a common figure — it is not universal. Some lenders offer more, some less, and some products have no allowance at all. Fixed-rate deals are more likely to carry early repayment charges, while tracker or standard variable rate products may be more flexible. Always check your latest mortgage statement or contact your lender to confirm your specific terms.
Frequently Asked Questions
Will overpaying my mortgage always save me money?
In most cases, yes — reducing the balance faster means less interest accrues. However, if your lender charges an early repayment fee that exceeds the interest you would save, overpaying could cost more than it saves. This calculator includes an ERC break-even check to flag that risk.
How do I know my overpayment allowance?
Check your mortgage offer, annual statement, or lender’s website. The allowance is usually expressed as a percentage of the original or current balance per year. If you are unsure, contact your lender directly before making large overpayments.
Should I overpay my mortgage or save the money instead?
It depends on your interest rate, savings rate, and personal priorities. The “Overpay vs Save” section above gives a simplified comparison of interest avoided versus illustrative savings growth. It does not include tax or inflation, so treat it as a starting point rather than definitive advice.
Does this calculator account for rate changes?
No. The calculator assumes the interest rate and payment structure you enter remain fixed for the entire term. If you expect your rate to change, you can model different scenarios by adjusting the inputs.
Can I use this calculator for interest-only mortgages?
This calculator is designed for repayment (capital and interest) mortgages. Interest-only products work differently because the principal is not reduced by the regular monthly payment.
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