Mortgage Overpayment Calculator
Overpaying your mortgage is one of the most reliable returns available to a UK homeowner — every pound of interest avoided is effectively a tax-free return at your mortgage rate. Enter your balance, rate, and remaining term, then add either a monthly overpayment or a lump sum to see how much you save and how many years come off the term.
How is this calculated?
The model amortises the mortgage month by month using the standard annuity formula, then re-runs the schedule with overpayments applied as either a recurring monthly amount or a one-off lump sum at month one. The difference between the two interest totals is your saving; the difference in the number of months until the balance hits zero is the time cut off the term. The calculator assumes overpayments reduce the term rather than the monthly payment.
Frequently Asked Questions
Will my lender let me overpay?
Most UK fixed-rate deals allow overpayments of up to 10% of the outstanding balance each year without an early repayment charge. Trackers and variable products are usually fully flexible. Always check the product terms, especially in the final year of a fix when going over the allowance is easiest to do by accident.
Should I overpay the mortgage or save into an ISA?
Compare your mortgage rate to the after-tax return you can realistically earn elsewhere. With base rate elevated, mortgage rates of 4%–5% often beat cash ISA returns, making overpayment the rational choice. Stocks-and-shares ISAs can outperform over long horizons but carry market risk.
Is it better to reduce the term or the monthly payment?
Reducing the term saves much more interest because the loan is gone sooner. Reducing the monthly payment improves cash flow but the loan still runs the original length, so total interest savings are smaller. Most lenders default to keeping the term and lowering the payment unless you tell them otherwise.
How much can I save by overpaying £200 a month?
On a £250,000 mortgage at 4.5% over 25 years, an extra £200 each month saves around £37,000 in interest and clears the loan roughly 5 years early. Even £100 a month typically saves £20,000+ in interest on a similar-sized loan.
Last updated: May 2026 · Rates sourced from HMRC