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Results are estimates for guidance only and do not constitute financial advice. Check your lender's ERC terms and 10% overpayment cap before committing.
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How to Use the Mortgage Overpayment Calculator
- Enter your current mortgage balance — the amount outstanding today, not the original loan.
- Enter your remaining term — years left, not the original term length.
- Enter your interest rate — the APR currently on your deal. Fixed? Enter the fix rate. Tracker or SVR? Enter the current rate.
- Enter a monthly overpayment — any extra amount on top of your normal payment. £100 is common; £200 is more aggressive.
- Optional: lump sum — a one-off overpayment (bonus, inheritance, windfall) added at the start.
- Click "Calculate" — see interest saved, time saved, new payoff date, and a full comparison with the no-overpayment scenario.
What this calculator shows
Every standard UK repayment mortgage payment is split into two parts: interest (a bill the lender charges on the outstanding balance) and principal (money that actually reduces what you owe). In the early years, most of your payment is interest because the balance is still high. Overpayments go 100% to principal, which permanently reduces the interest that accrues for every remaining month. Small overpayments compound into large savings because you save interest not just once, but on every month remaining on the loan after the overpayment.
A typical UK repayment mortgage of £200,000 over 25 years at 4.5% APR costs about £133,500 in total interest over the term. A £150-per-month overpayment, consistent across the term, cuts that total by roughly £29,000 and shortens the term by nearly five years. Larger overpayments save more: £200/month saves about £36,000 and over six years; £300/month saves about £48,000 and over eight years.
How overpayments save you money (the snowball effect)
Interest on a mortgage is calculated on the outstanding balance each month. If you overpay £1,000 in month 1, that £1,000 is no longer generating interest for every remaining month of the loan. On a 25-year mortgage at 4.5%, that single £1,000 overpayment saves about £1,850 in future interest — almost double its face value. This is why overpaying early is far more impactful than overpaying in the final years.
For the same reason, a small regular overpayment outperforms a delayed lump sum of the same total amount. £100/month for 10 years (£12,000 total) saves far more than a single £12,000 overpayment in year 10, because each of those monthly £100 payments starts saving interest the moment it lands.
The 10% ERC rule (Early Repayment Charges)
Most UK fixed-rate mortgages allow you to overpay up to 10% of the outstanding balance per year penalty-free. Go above that and you pay an Early Repayment Charge — typically 1% to 5% of the overpaid amount, depending on the lender and how deep into the fix you are.
Standard variable rate (SVR) and tracker mortgages usually have no overpayment cap. Lifetime trackers, offset mortgages, and flexible mortgages are also typically uncapped. Check your mortgage offer document or lender's website for the exact 10% calculation period (usually 1 January to 31 December, or anniversary year).
To avoid ERCs while maxing overpayments: set up a monthly standing order totalling 10% of your outstanding balance per year. On a £200,000 balance, that's £20,000/year or about £1,667/month of overpayment before ERCs kick in — far more than most borrowers can actually afford.
Lump sum vs regular monthly overpayments
Both work. The maths is simple: every pound you pay down today saves you future interest, regardless of whether that pound arrives monthly or as a lump. The practical difference is behavioural:
- Monthly overpayments build discipline and are easier to budget for. Set up once, forget about it.
- Lump sums make sense for bonuses, tax refunds, inheritance, work payouts, or when your savings exceed your emergency fund and have no better use.
Tip: use regular overpayments as a baseline and add lump sums when they appear. That's often the fastest path to a payoff.
Worked example — £200,000 mortgage, 4.5%, 25 years, £150/mo overpayment
Using the calculator inputs above, here is the exact comparison:
| Scenario | Monthly payment | Total interest | Payoff term |
|---|---|---|---|
| Without overpayments | £1,111.66 | £133,499 | 25 years |
| With £150/mo overpayment | £1,261.66 | £104,216 | 20 years 2 months |
Savings: £29,283 in interest, 4 years 10 months off the term. The extra £150/month (£18,000 over the new 20-year term) returns over £29,000 in saved interest — a 62% return on the total overpayments. That's hard to beat with almost any investment strategy after tax.
When NOT to overpay
Overpayments are powerful but not always optimal. Consider other priorities first:
- Credit card debt at 20-40% APR — pay that down first. Always. No mortgage overpayment beats cancelling 25% APR debt.
- Personal loans or car finance at higher APR than your mortgage — same logic. Tackle the highest-rate debt first.
- No emergency fund — build 3–6 months of expenses in a savings account before overpaying. A lost job while sitting on an over-paid mortgage is worse than the reverse.
- Savings rate higher than mortgage rate (after tax) — if you can get 5% in a Cash ISA and your mortgage is at 4%, save first and settle later (see our full overpayment guide for the calculations).
- Under-funded pension — employer match and tax relief on pension contributions often give a 50%+ effective return, which beats any mortgage overpayment.
Consider remortgaging first
Compare remortgage deals
Before committing to overpayments, check whether a better rate is available. A lower rate can save more than overpayments alone.
* External link. daytics may earn a commission if you apply through this link.
Practical steps to start overpaying
- Check your mortgage agreement — look for overpayment terms, the 10% cap, and any ERCs. This is in the key facts illustration or your online mortgage account.
- Decide: reduce term or reduce monthly? — most lenders default to reducing term (which saves more interest). If you specifically want lower monthly payments, you need to ask.
- Set up a standing order from your current account to the mortgage — use the overpayment reference your lender provides, not your normal payment reference.
- Start small, review yearly — £50/month is better than nothing. Increase when salary rises, bills fall, or debts clear.
- Re-run the numbers every 12 months — interest rates change, balances change. Use this calculator to confirm the savings are still compelling.
Will overpaying my mortgage affect my credit score?
No. UK mortgage overpayments are not reported to credit reference agencies as a separate event. Your monthly payment still shows as paid on time, and the balance reducing faster is a long-term positive signal when you next apply for credit. Missed payments damage your score; overpayments do not.
Does overpayment reduce my monthly payment or shorten the term?
Most UK lenders default to shortening the term when you overpay, which saves the most interest. If you want your monthly payment reduced instead (while keeping the original term), you have to specifically request it when making the overpayment. Some lenders let you set a default preference in your online mortgage account.
Can I get my overpayment money back if I need it?
It depends on your mortgage type. Standard fixed-rate and tracker mortgages treat overpayments as final - you cannot withdraw the money back later. Flexible mortgages, offset mortgages, and some tracker products allow you to redraw overpayments. Check your agreement for "drawdown" or "borrow back" features before relying on this.
What's an ERC and how much does it cost?
An Early Repayment Charge is a penalty some lenders apply if you overpay above a threshold (usually 10% of the balance per year) or redeem the mortgage entirely during a fixed rate period. ERCs are typically 1% to 5% of the overpaid amount, sliding down each year of the fix. Your mortgage agreement states the exact ERC schedule.
Is it better to overpay or invest in my ISA?
The maths depends on your mortgage rate vs expected investment return after tax. If your mortgage is at 4.5% and your Stocks & Shares ISA averages 7%, investing wins in expectation but you carry market risk. If your mortgage is at 5.5% and Cash ISA pays 4.5%, overpaying is a guaranteed net-positive move. For most UK borrowers with a 4-5% mortgage and a long horizon, a split approach (some overpayment, some ISA) is optimal.
