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Buying Budget

Mortgage Overpayment Calculator

Estimate only

Overpaying reduces the balance that interest is charged on, so it can cut both the total interest and the length of your mortgage. This tool illustrates the difference between keeping your current payment and adding an overpayment.

Applied once every twelve months.

Estimated interest saved

£33,849

And around 5 years off the term.

Current monthly payment

£1,169.18

New monthly payment

£1,319.18

Time saved

5 years

New estimated repayment period

20 years 1 month

Interest without overpaying

£150,754

Interest with overpaying

£116,905

Things to be aware of

  • Most UK lenders allow overpayments of up to 10% of the outstanding balance each year without charge, but limits and early repayment charges vary by product. Check your mortgage offer before overpaying.

Estimate only

Lender overpayment limits, early repayment charges and mortgage terms vary. Some lenders reduce the term, others reduce the monthly payment — the effect differs. Check your mortgage offer or ask your lender before making overpayments.
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How this calculation works

We calculate your contractual monthly payment from the balance, rate and remaining term, then run two month-by-month simulations: one with the contractual payment only, and one with your overpayment (plus any lump sum every twelfth month). The difference in months and in total interest is shown.

contractual payment M = P · r ÷ (1 − (1 + r)^−n)
each month: interest = balance × r; balance = balance + interest − (M + overpayment)
saving = interest(no overpayment) − interest(with overpayment)

Assumptions

  • The interest rate stays the same for the remaining term.
  • Overpayments are made every month and reduce the term rather than the payment.
  • No early repayment charges or overpayment limits are applied.

Limitations

  • Most lenders cap penalty-free overpayments, commonly at 10% of the balance a year.
  • Interest calculation frequency varies between lenders.
  • Overpaying is not automatically the best use of money; this tool does not advise you.

Last reviewed: 1 September 2026 · Calculation version 1.0.0

Checking whether an overpayment illustration fits your deal

What the comparison holds constant

The model compares the original schedule with extra payments under the same rate assumptions. It illustrates faster balance reduction and interest saved, not a guaranteed investment return. If your rate changes, future savings change too. If the lender reduces the required payment after an overpayment, continuing to pay the original amount may require a specific instruction; do not assume the lender automatically shortens the term.

Allowance and charge example

If your contract allowed 10% of a £150,000 reference balance, the allowance would be £15,000. An extra £200 a month totals £2,400 over 12 months, but lump sums must also count if the contract says so. This is only an example: your lender may use an anniversary year, a calendar year or a different reference balance. The calculator does not enforce your allowance or deduct an early repayment charge.

Do not ignore access to cash

An overpayment reduces mortgage debt, but money may not be easy to withdraw later. Compare the benefit with expensive unsecured debt, emergency savings and any charge for repaying early. Flexible and offset mortgages behave differently from a standard repayment loan. Ask the lender how an extra payment changes your balance, term and required monthly payment before sending money.

Further reading: MoneyHelper — should you pay off your mortgage early?. Examples are illustrations using stated inputs, not quotes or personal recommendations.

See our method and limitations or report a correction.

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