Overview
This mortgage overpayment calculator shows how paying a little (or a lot) extra could shorten your mortgage and save you thousands in interest. Enter your balance, rate and remaining term, then add a regular monthly overpayment, a one-off lump sum, or both. You'll instantly see how many years and months you could shave off, the interest saved, your balance at key milestones, and a year-by-year schedule. There's also a warning if your overpayments would exceed a typical 10% annual allowance, where an early repayment charge might apply.
How it's calculated
We run a month-by-month simulation of your mortgage twice — once on your current plan, and once with your overpayments — then compare them.
- Each month, interest is charged on the outstanding balance.
- Your contractual payment clears that interest and chips away at the capital.
- Any overpayment comes straight off the balance, so less interest builds up next month.
Because overpayments reduce the balance directly, they have a compounding effect: every pound overpaid early saves interest for the rest of the term. This version keeps your monthly payment the same and shortens the term.
Each month: balance = balance + interest − contractual payment − overpayment
Interest each month = balance × (annual rate ÷ 12). The simulation stops when the balance reaches zero — that's your new, earlier mortgage-free date.
Worked example
Take a £200,000 mortgage at 4.5% with 25 years left, overpaying £150 a month:
| Contractual monthly payment | £1,112 | |
|---|---|---|
| Extra each month | £150 | |
| Time saved | ≈ 4 years 10 months | |
| Interest saved | ≈ £29,300 | |
| Total overpaid | ≈ £36,150 |
An extra £150 a month — about £36,150 over the shortened term — could save roughly £29,300 in interest and clear the mortgage almost five years early. Use the £50 / £100 / £250 presets above to see how the saving grows.
Current rates & key facts
Overpayment key facts
| Item | Detail |
|---|---|
| Typical annual allowance | Many lenders let you overpay 10% of the balance each year penalty-free |
| Early repayment charge (ERC) | May apply to overpayments above the allowance, often 1%–5% of the excess |
| Reduce term vs reduce payment | Keeping the payment the same and cutting the term saves the most interest |
Allowances and early repayment charges vary by lender and product — always check your mortgage terms before making large overpayments.
Last updated 29 June 2026 · Source: MoneyHelper — Mortgage overpayments