Mortgage Overpayment Calculator
Even small overpayments can save you thousands in interest and take years off your mortgage. See exactly how much you could save.
Enter your mortgage details below to compare your current repayment schedule against one with overpayments.
Your Mortgage Details
Your Savings
Interest saved
£38,458
Time saved
5 years 1 month
10% annual overpayment allowance
£25,000 per year
Without Overpayments
With Overpayments
This calculator assumes a repayment mortgage with fixed interest rate for the remaining term. Actual results will vary if your rate changes. The lump sum is applied at month one.
Year-by-Year Balance Comparison
| Year | Without overpayment | With overpayment | Difference |
|---|---|---|---|
| Start | £250,000 | £250,000 | - |
| Year 1 | £244,462 | £242,012 | £2,450 |
| Year 2 | £238,669 | £233,656 | £5,013 |
| Year 3 | £232,610 | £224,917 | £7,693 |
| Year 4 | £226,273 | £215,776 | £10,497 |
| Year 5 | £219,645 | £206,216 | £13,429 |
| Year 6 | £212,712 | £196,216 | £16,496 |
| Year 7 | £205,461 | £185,757 | £19,704 |
| Year 8 | £197,876 | £174,817 | £23,059 |
| Year 9 | £189,943 | £163,375 | £26,569 |
| Year 10 | £181,646 | £151,407 | £30,240 |
| Year 11 | £172,968 | £138,889 | £34,079 |
| Year 12 | £163,891 | £125,796 | £38,095 |
| Year 13 | £154,397 | £112,102 | £42,295 |
| Year 14 | £144,466 | £97,778 | £46,688 |
| Year 15 | £134,080 | £82,797 | £51,283 |
| Year 16 | £123,216 | £67,127 | £56,089 |
| Year 17 | £111,853 | £50,738 | £61,116 |
| Year 18 | £99,969 | £33,595 | £66,374 |
| Year 19 | £87,538 | £15,665 | £71,873 |
| Year 20 | £74,536 | £0 | £74,536 |
| Year 21 | £60,937 | £0 | £60,937 |
| Year 22 | £46,713 | £0 | £46,713 |
| Year 23 | £31,836 | £0 | £31,836 |
| Year 24 | £16,276 | £0 | £16,276 |
| Year 25 | £0 | £0 | - |
How Mortgage Overpayments Work
Understanding the mechanics helps you see why overpaying is so powerful.
Extra payments reduce the balance
When you overpay, the extra money goes directly towards reducing your outstanding mortgage balance. This is the capital you owe, not the interest.
Lower balance means less interest
Interest is calculated on your remaining balance each month. A smaller balance means less interest is charged, so more of your regular payment goes towards the capital.
Less interest shortens your term
Because you are paying off the capital faster, you reach a zero balance sooner. This means you could be mortgage-free months or even years earlier than planned.
The 10% Rule
Most fixed-rate mortgages allow you to overpay up to 10% of the outstanding balance each year without incurring early repayment charges (ERCs). If you exceed this limit, lenders typically charge between 1% and 5% of the excess amount.
How it works in practice
On a mortgage balance of £250,000, you can overpay up to £25,000 per year without charges. That is roughly £2,083 per month. Most borrowers will stay well within this limit with regular monthly overpayments. The allowance resets each year on your mortgage anniversary date.
Regular vs Lump Sum Overpayments
Both approaches reduce your mortgage, but they suit different situations.
Regular monthly overpayments
- Builds a consistent habit of reducing your balance
- Easy to set up as a standing order
- Reduces interest from the first month
- Easier to stay within the 10% annual allowance
Lump sum overpayments
- Ideal when you receive a bonus, inheritance, or windfall
- Immediate large reduction in outstanding balance
- Bigger impact the earlier in the term you make the payment
- Check the 10% limit before making a large lump sum payment
When Not to Overpay
Overpaying your mortgage is not always the best use of your money. Consider these situations first.
You have higher-interest debt
Credit cards, personal loans, and car finance usually charge far more interest than your mortgage. Pay those off first — you will save more overall.
It would deplete your emergency fund
Keep at least three to six months of essential expenses in an accessible savings account before directing spare cash to your mortgage. Once overpaid, the money is generally locked in.
You are on a very low tracker rate
If your mortgage rate is below what you could earn in a savings account or investment, the maths may favour saving or investing instead. Compare your net returns carefully.
Early repayment charges apply
If you are on a fixed rate and have already used your 10% annual allowance, further overpayments will trigger ERC fees that could wipe out the interest saving.
Frequently Asked Questions
How much can I overpay without penalty?
Most fixed-rate mortgages allow 10% of the outstanding balance per year. On a £200,000 mortgage that is £20,000 per year. Tracker and variable rate mortgages often have no overpayment limits.
Is it better to overpay or save?
If your mortgage rate is higher than your savings rate, overpaying saves more. At 5% mortgage rate vs 4% savings, every £100 overpaid saves more than £100 in a savings account.
Can I get my overpayments back?
Some lenders allow you to “borrow back” overpayments, but most do not. Check with your lender before relying on this. Once overpaid, the money is generally locked into your mortgage.
Should I reduce the term or the payment?
Reducing the term (keeping payments the same but finishing sooner) saves the most interest. Reducing the payment gives you more monthly flexibility. Many lenders let you choose.
Check How Much You Can Borrow Across 60+ Lenders
Whether you are remortgaging or buying for the first time, find out how much lenders will actually offer you. We check 60+ UK lenders in minutes — no credit search performed.
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