Mortgage Overpayment Calculator

How much will you save by overpaying?

On a £200,000 balance at 5% with 25 years left, the normal payment is about £1,169 a month. Adding £100 on top of that saves £24,505 in interest and clears the mortgage 3 yrs 6 mos early. The table runs the common overpayments so you can find the one nearest yours.

£200,000 at 5% with 25 years remaining. Each row is simply what the calculator above returns for that overpayment. Your own balance, rate and remaining term change every figure, so put them in rather than reading straight off the row · but the shape holds: even a modest overpayment takes a large bite out of the interest, because every extra pound stops accruing interest for all the months that follow. Note where it stops being proportional. Doubling the overpayment does not double the saving, because a bigger overpayment also ends the mortgage sooner and leaves fewer months for the last pounds to save anything.

Should you overpay the mortgage or save the money?

This has a clean answer, and it is a comparison of two rates rather than a matter of opinion. Overpaying earns you a guaranteed return equal to your mortgage rate, because every pound off the balance is a pound that stops being charged interest. Saving beats it only when the rate you earn, after tax, is higher than the rate you pay.

For context on one side of that sum, the Bank of England's quoted average two-year fix at 75% loan-to-value was 4.92% in August 2026 and ran between 3.93% and 5.14% across the year. The other side is your own savings rate after tax, which is the figure to go and look up · the comparison only works with both.

Two things sit outside the arithmetic and usually decide it. Money in savings can be taken back out and money paid off a mortgage cannot, so an emergency fund comes first whatever the rates say. And many fixed-rate deals cap how much you can overpay without a penalty, then charge an early repayment charge above the cap · that cap and that charge are in your own mortgage offer, and they are worth reading before you set up a standing order.

How overpaying works

Your mortgage charges interest on what you still owe. When you overpay, that extra money comes straight off the balance, so from then on you are charged interest on a smaller amount. The saving compounds: a lower balance means less interest next month, which means more of your normal payment clears the loan, and so on. Even a small regular overpayment can knock years off the term.

To see what your normal payment would be in the first place, use the mortgage repayment calculator. For the bigger picture, monthly versus lump sum and the limits to watch, read overpaying your mortgage.

Common questions

Does overpaying my mortgage save money?

Yes. Every extra pound comes straight off the balance, so you are charged less interest for the rest of the term. Overpay regularly and you clear the mortgage sooner and pay less interest overall, often by thousands of pounds.

Is it better to overpay monthly or with a lump sum?

Both help. A lump sum cuts the balance straight away, so it saves the most interest per pound. Regular monthly overpayments are easier to budget for and add up over time. The calculator lets you try either or both.

Are there limits or penalties on overpaying?

Usually yes. Most fixed-rate deals cap how much you can overpay in a year without a charge, and an early repayment charge applies above the cap. The cap and the charge are both set in your own mortgage offer rather than by any general rule, so check yours before making a large overpayment.

Should I overpay the mortgage or save instead?

Compare your mortgage rate with the interest a savings account would pay. If your mortgage costs more than you could earn in savings, overpaying usually wins. Keep an emergency fund first, and clear pricier debts like credit cards before overpaying a mortgage.

Will overpaying lower my monthly payment or my term?

It depends what you ask your lender to do. By default most reduce the term, which saves the most interest. Some let you keep the term and lower the monthly payment instead. This calculator assumes you keep paying the same amount and finish sooner.

About this calculator

Uses the standard amortisation formula, holding your rate and payment steady and applying overpayments straight to the balance. Real mortgages can have overpayment limits and early repayment charges, and rates change at the end of a deal, so treat the figures as a guide. Your overpayment allowance and any early repayment charge are set in your own mortgage offer, and free guidance on both is available from MoneyHelper. An estimate to help you plan, not financial advice. Last updated June 2026.