Mortgage Overpayment Calculator
See how much interest you save and how many years earlier you finish the mortgage when you pay extra each month.
- Without overpayment
- With £100/month overpayment
Overpaying £100 per month saves £20,864 of interest and clears the mortgage 2 years and 10 months earlier. Without overpayment the balance falls from £250,000 to £0 over the full term; with overpayment it reaches zero at month 266.
| Year | Balance without overpayment | Balance with overpayment |
|---|---|---|
| 0 | £250,000 | £250,000 |
| 1 | £244,342 | £243,118 |
| 2 | £238,433 | £235,930 |
| 3 | £232,261 | £228,423 |
| 4 | £225,816 | £220,584 |
| 5 | £219,085 | £212,396 |
| 6 | £212,055 | £203,845 |
| 7 | £204,714 | £194,915 |
| 8 | £197,046 | £185,589 |
| 9 | £189,039 | £175,849 |
| 10 | £180,676 | £165,676 |
| 11 | £171,942 | £155,052 |
| 12 | £162,820 | £143,957 |
| 13 | £153,294 | £132,370 |
| 14 | £143,345 | £120,268 |
| 15 | £132,954 | £107,630 |
| 16 | £122,103 | £94,431 |
| 17 | £110,770 | £80,646 |
| 18 | £98,934 | £66,249 |
| 19 | £86,573 | £51,214 |
| 20 | £73,664 | £35,511 |
| 21 | £60,182 | £19,112 |
| 22 | £46,102 | £1,985 |
| 23 | £31,397 | £0 |
| 24 | £16,039 | £0 |
| 25 | £0 | £0 |
- Capital (64.2%)
- Interest (35.8%)
Without overpayment, 39.1% of your total payments would have been interest.
| Outstanding balance | £250,000 |
|---|---|
| Interest without overpayment | £160,483 |
| Interest with overpayment | £139,619 |
| Interest saved | −£20,864 |
| Total paid (with overpayment) | £389,619 |
Information
Overpaying a mortgage means paying more than the lender's scheduled monthly amount. The extra goes straight to capital; it never gets to accrue interest. Because mortgages compound daily on the outstanding balance, even a small extra each month produces an outsized total saving over a 25 or 30 year term. The calculator above runs the same day-by-day compounding the lender does (the rate you enter is the AER, the realised yearly accrual, not a nominal monthly rate), so the figures match what a remortgage statement would show to within rounding.
How the saving works. Every pound of overpayment cancels future interest at the mortgage rate, applied to the remaining term. Over a 25-year mortgage at 4.5% AER, an extra £100/month adds up to £30,000 of capital, but the interest that capital would have generated over a quarter century is several times the headline. The earlier in the term you overpay, the longer each pound has to compound out, so the marginal saving from the first year of overpayments is materially larger than the marginal saving from the last year.
Overpay mortgage vs invest in an ISA. This is the question most readers actually arrive with. The honest answer is that it depends on more variables than a five-field calc can capture: your marginal tax rate, whether your ISA allowance is already used, whether you have higher-interest debt, your employer pension match, your emergency-fund position, and how secure your income feels. A naïve "mortgage rate 4.5% vs ISA growth 7% → ISA wins" comparison ignores volatility (the ISA growth rate is an average, not a guarantee), tax wrapper availability, and the optionality value of having flexible savings vs locked-in equity. We deliberately don't return a verdict here. Use the number on this page to size the overpayment option in isolation; then open the full planner to see the overpayment alongside your ISA, pension, taxes, and the rest of your financial picture. That's the surface where the trade-off becomes legible.
Emergency fund vs mortgage overpayment. Most lenders don't let you draw an overpaid amount back out as a lump sum; the cash is locked into the mortgage until you remortgage or sell. If you don't already have 3 to 6 months of expenses sitting in an accessible savings account, that's almost always the better destination for the same monthly amount, even though the savings rate is lower than the mortgage rate. Flexibility in a crisis is worth more than the rate spread. Build the emergency fund first; overpay second.
What's not in this calculator. Most lenders cap penalty-free annual overpayments at 10% of the outstanding balance, and charge an early-repayment charge (ERC) above that. The calc assumes the overpayment stays within your lender's annual allowance; check your offer document. Variable / tracker rates are also not modelled directly; the calc compounds at one fixed rate. The full planner models year-by-year rate paths against the wider UK yield curve.
FAQ
- Should I overpay my mortgage or invest the money instead?
It's tempting to compare your mortgage rate against an ISA growth rate and pick the higher one, but the honest answer depends on more than two numbers: your marginal tax rate, whether your ISA allowance is already used, whether you have higher-interest debt elsewhere, your employer pension match, your emergency-fund position, and how secure your income feels. A calculator that returns a one-line verdict on this question is hiding the variables that actually decide it. Use the figure on this page to size the overpayment option in isolation, then open the full planner to see it alongside your ISA, pension, and other commitments; that's where the trade-off becomes legible.
- Are there any penalties for overpaying my mortgage?
Most UK mortgages allow up to 10% of the outstanding balance per year as a penalty-free overpayment. Above that, lenders charge an early-repayment charge (ERC), typically 1 to 5% of the overpaid amount and falling year by year through the fixed-rate period. Check your mortgage offer document for the exact terms. This calculator assumes no ERC, i.e. that the monthly overpayment stays within your lender's annual allowance.
- Should I keep an emergency fund instead of overpaying?
Cash overpaid into the mortgage is generally locked in until you remortgage or sell; most products don't let you draw it back out as a lump sum the way an offset mortgage does. If you don't already have 3 to 6 months of expenses sitting in an accessible savings account, that's almost always the better destination for the same monthly amount. The interest a savings account earns is lower than the interest a mortgage charges, but the flexibility to cover a sudden income gap or boiler replacement is worth more than the rate spread. Build the emergency fund first; overpay second.
- Does the calculator account for variable / tracker rates?
No: the calc compounds at the single annual rate you enter for the full remaining term. If your rate is tracker / SVR and you expect it to change, run the calc twice with high and low rate estimates to bracket the interest-saved figure. The full planner models rate paths year by year against the wider UK BoE curve, which is the natural place to model rate uncertainty over a 25-year term.
Sources
- Money Helper: Mortgage overpayments (GOV.UK)
Disclaimer
Not financial advice. The figures above are arithmetic on the inputs you provided, they don't account for your lender's specific overpayment terms (annual cap, ERCs), variable-rate trajectories, or the opportunity cost of locking cash into the mortgage vs alternative uses (emergency fund, ISA, pension contributions). Consult a qualified mortgage adviser before making a decision based on these numbers.
