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How this works
When you overpay, the extra comes straight off what you owe. That means less interest next month, so more of your normal payment goes towards the loan, and the effect builds over time.
The calculator works out your normal monthly payment, then runs your mortgage twice, once as it is and once with your overpayments, adding interest and taking off payments each month. The gap between the two shows the interest you save and how much sooner you’re mortgage-free.
What it assumes
- The interest rate stays the same for the rest of the mortgage.
- Your lender keeps your monthly payment the same and shortens the term. Some reduce the payment instead, which saves less interest.
- There are no early repayment charges. Many fixed deals let you overpay up to 10% of the balance a year without one, but check your own deal.
Worked example
£250,000 left, 25 years to go, at 4.5%
- Your normal payment is £1,389.58 a month, and you’d pay £166,874 in interest over the term.
- Overpaying £200 a month saves £38,458 in interest and makes you mortgage-free 5 years 1 month sooner, in 19 years 11 months.
- That’s £2,400 a year, well within a typical 10% limit of £25,000.
- A single £10,000 lump sum today, with no monthly overpayment, saves £19,584 and 1 year 9 months.
Worked out with the same maths as the calculator above.
What to do next
Common questions
Is it better to overpay monthly or as a lump sum?
Money paid earlier saves more, so a lump sum now beats the same amount spread over the year. Monthly overpayments are easier for most budgets. Many people do both: a small monthly amount plus any bonus.
Should I overpay or save?
Build an emergency fund first, because overpayments are hard to get back. After that, compare your mortgage rate with what your savings earn after tax. If the mortgage rate is higher, overpaying usually wins.
Will overpaying lower my monthly payment?
It depends on your lender. Some shorten the term and keep the payment the same, which is what this calculator assumes. Others recalculate a lower payment. Ask which yours does.
Can I overpay on a fixed-rate deal?
Usually, up to a limit. Many fixed deals allow 10% of the balance a year without a charge; go over and you could pay an early repayment charge. Your mortgage offer will say.