Mortgage Overpayment Calculator

This calculator shows what happens if you pay a little extra towards your mortgage — as a regular monthly top-up, a one-off lump sum, or both. It tells you how much sooner you'd be mortgage-free and how much total interest you'd avoid over the remaining term.

The reason overpayments are powerful is compounding in reverse: interest is charged on whatever balance is left, so every extra pound paid today removes interest from every future month. Pound for pound, an overpayment made in year one is worth far more than the same overpayment made in year twenty.

It's most useful for borrowers a few years into a fixed deal who suddenly have spare cash flow — a pay rise, a smaller energy bill, a finished car loan. It's less useful if you're carrying higher-cost debt elsewhere (credit cards, overdrafts) or don't yet have an emergency fund; in both those cases your money usually works harder somewhere else first.

A worked example

Take a £200,000 mortgage at 5% with 25 years remaining. The standard monthly payment is around £1,169. Add £200 a month on top and you'd clear the mortgage roughly six years earlier and save in the region of £55,000 in interest over the term. A single £10,000 lump sum paid today, with no other changes, would save a further £15,000–£20,000 by the time the term ended — because that £10,000 stops attracting interest for the next 25 years.

Why this matters

For most households, the mortgage is the largest debt they'll ever hold and the largest single line on the monthly budget. Even modest overpayments — the cost of a takeaway a week — meaningfully change both the date you finish paying and the total interest bill. Crucially, the "return" on an overpayment is guaranteed and equal to your mortgage rate, which is one of the few risk-free returns most people can access.

Common mistakes

• Overpaying without checking the early repayment charge cap on a fixed deal (commonly 10% of the balance per year).
• Overpaying before building a 3–6 month emergency fund — once the money's in the mortgage, it's hard to get back without remortgaging.
• Overpaying while carrying credit card or personal loan debt that costs more than the mortgage rate.
• Asking the lender to lower the monthly payment when shortening the term would save far more in total interest.
• Forgetting to tell the lender it's an overpayment — some lenders treat extra payments as advance payments unless you specify.

Beyond the numbers

A sensible overpayment plan usually sits inside a wider order of priorities: a working emergency fund first, then any higher-rate debt cleared, then long-term tax-efficient investing (workplace pension, ISA), with overpayments competing alongside the last of those. Within the mortgage itself, the two choices that matter most are the early repayment charge limit on your current deal and whether to shorten the term or reduce the monthly payment when you overpay. Shortening the term keeps the budget the same and compounds the benefit; reducing the payment frees up cash flow now but gives back much of the saving. If the choice feels close, a partial split — overpay some, keep some flexibility — is usually fine. See the Mortgage Calculator to compare the resulting monthly payment under each scenario.

Related tools: Mortgage Calculator · Mortgage Affordability · House Deposit · Savings Goal