Mortgage overpayment calculator
See what paying a bit extra each month does to the interest and to the term, and whether an early repayment charge would eat the benefit. Nothing is stored and nothing is sent anywhere.
Risk warning. Your home may be repossessed if you do not keep up repayments on your mortgage. Think carefully before securing other debts against your home. This calculator is an illustration only. It is not a personal recommendation and it is not an offer of credit.
This is a calculation, not a quote and not advice. It assumes your rate stays the same for the rest of the term and that overpayments reduce the term rather than the monthly payment, which is the more common of the two options but not the only one. Check what your lender actually does before relying on it.
Why overpaying works so hard
Interest is charged on what you still owe. An overpayment comes straight off the balance, so every month afterwards is charged on a smaller number. The saving is not the overpayment itself, it is all the interest that overpayment stops from ever being charged.
That is why timing matters more than size. An overpayment made in year two has twenty-plus years to compound in your favour. The same amount in year twenty-two saves almost nothing, because there was barely any interest left to avoid.
Most lenders let you overpay up to ten per cent of the outstanding balance each year without penalty. Go beyond that while you are inside a fixed or discounted deal and an early repayment charge usually applies, typically a percentage of the amount repaid, and it can wipe out the interest you were trying to save.
Before you start overpaying
Check the penalty-free allowance first.
It is usually ten per cent of the balance a year, but it is not universal, and some lenders calculate it on the balance at the start of the year rather than today. The exact wording is in your mortgage offer.
Decide whether you want a shorter term or a smaller payment.
Most lenders will do either. Reducing the term saves far more interest. Reducing the payment gives you monthly breathing room. This calculator assumes the first.
Ask whether the money is better used elsewhere.
Overpaying is a guaranteed return equal to your mortgage rate, which is genuinely good. But if you have more expensive debt, no emergency fund, or unused pension relief, those may come first. That is a planning conversation, not a calculation.
Remember you usually cannot get it back.
Money overpaid is gone into the house unless your lender offers a borrow-back or offset facility. That matters if your income is lumpy, which for most business owners it is.
Try the others
Repayment
The monthly payment on a repayment mortgage and what it costs over the term.
Mortgage repayment calculatorCompound interest
The same maths working for you rather than against you.
Compound interest calculatorMortgage advice
Whether overpaying or remortgaging is the better move on your numbers.
How we handle mortgagesWorth checking before you commit the money.
Overpaying is often right, and sometimes it is the wrong home for the cash.
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