Mortgage Overpayment Calculator UK — See How Much You Save

A mortgage overpayment calculator simulates your mortgage month by month. It takes your balance, interest rate, and remaining term to calculate your normal monthly payment, then adds your overpayment on top. Because each extra pound reduces the balance faster, less interest accrues in subsequent months — so more of each future payment pays off capital. The calculator adds up these compounding savings to show your total interest saved and how many months sooner you become mortgage-free.

The saving depends on your balance, rate, and term. As an example: overpaying £200/month on a £200,000 mortgage at 4.5% with 20 years remaining saves roughly £21,000 in interest and cuts 4 years from the term. The higher the interest rate and the earlier in the mortgage term you start overpaying, the greater the saving — because there are more months left for the interest reduction to compound.

Most UK lenders allow penalty-free overpayments of up to 10% of the outstanding mortgage balance per year. Exceeding this during a fixed-rate or tracker deal may trigger an Early Repayment Charge (ERC), typically 1–5% of the amount overpaid above the limit. Always check your mortgage terms before making large overpayments — the ERC schedule is in your original mortgage offer document.

Compare the two interest rates. If your mortgage rate is higher than the after-tax return on savings, overpaying beats saving. In 2025–2026 with mortgage rates at 4–5% and savings accounts at 4–5%, it is close. Key tiebreaker: do you have an emergency fund? Build 3–6 months of expenses in savings first. Then if your mortgage rate exceeds your savings rate (after income tax on interest), overpaying is likely the better financial decision.

Yes. A lump sum (one-off overpayment) reduces your balance immediately, so every subsequent monthly payment generates less interest. The timing matters — the earlier in the term you make a lump sum overpayment, the greater the compounding benefit over the remaining years. Our calculator includes a lump sum field so you can model this alongside a monthly overpayment.

This depends on your lender. Most UK lenders apply overpayments to reduce the remaining term (you keep paying the same amount each month but pay it off sooner). Some lenders re-calculate and reduce your monthly payment instead. Check with your lender — if you want maximum interest savings, ask them to apply overpayments to reduce the term rather than the monthly payment.

An Early Repayment Charge is a fee your lender charges if you pay off more than the permitted overpayment allowance during a deal period (typically a fixed or tracker rate). ERCs are usually expressed as a percentage of the overpaid amount — for example, 3% in year one, 2% in year two, 1% in year three of a 3-year fix. Always check the ERC schedule in your mortgage offer before making large overpayments. Once you are on your lender's Standard Variable Rate, there is usually no ERC.

Your current mortgage balance appears on your annual mortgage statement, your lender's online portal, or your most recent monthly statement. It is the amount still owed — not the original loan amount. When using this calculator, use the current outstanding balance (what you owe today), not the original mortgage amount.