Mortgage Overpayment Calculator
See how extra payments reduce your term and save interest
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Important: Check your mortgage agreement for overpayment limits — most fixed-rate deals allow up to 10% of the outstanding balance per year without early repayment charges. This calculator provides estimates only and does not constitute financial advice. We are not authorised or regulated by the FCA. Consult your lender or a qualified mortgage adviser.
How Mortgage Overpayments Work
When you overpay your mortgage, the extra money goes directly toward reducing your outstanding capital balance. Because interest is calculated on the remaining balance, a lower balance means less interest charged each month — creating a snowball effect that accelerates repayment.
Even modest overpayments of £100-200/month can shave years off a 25-year mortgage and save tens of thousands in interest.
Overpayment Limits
Most fixed-rate mortgages allow overpayments of up to 10% of the outstanding balance per year without incurring an Early Repayment Charge (ERC). If you're on a tracker or variable rate, there's usually no overpayment limit. Always check your mortgage terms before making overpayments.
Alternatives to Overpaying
- Offset mortgage: Savings sit alongside your mortgage and reduce the balance on which interest is charged, but you retain access to the funds.
- Lump sum payments: Some people prefer saving and making one large annual payment rather than monthly overpayments.
- Shorter term on remortgage: When your fix ends, switch to a shorter term to achieve a similar effect.