TheFreeTool

UK Mortgage Overpayment Calculator

Enter your mortgage balance, rate and term, then try a monthly overpayment or a one-off lump sum. You will see how much interest you save and how much sooner the mortgage ends.

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Where the numbers come from

Good to know

This is an estimate for general information. It is not tax, legal or financial advice. Your payslip can differ because of tax codes, credits, local taxes, benefits and your employer's rules. Check official guidance or ask a qualified adviser.

What it does

  • Monthly overpayments and one-off lump sums, together or separately
  • Interest saved, time saved and the new end date of the mortgage
  • A chart comparing your plan with and without overpaying
  • A check against the usual 10% a year overpayment allowance
  • Works for repayment mortgages in pounds

How to use it

  1. Enter your mortgage balance, interest rate and the time left.
  2. Add a monthly overpayment, a lump sum, or both.
  3. Read the interest and time you save, and look at the chart.
  4. Check the allowance note before you commit, and ask your lender about early repayment charges.

Why does overpaying save so much?

On a repayment mortgage, interest is worked out on what you still owe. Every pound you overpay cuts the balance straight away, so next month's interest is a little lower, and so is the month after. The saving compounds, which is why small regular overpayments can take years off a long mortgage.

Many fixed deals let you overpay up to 10% of the balance each year without a charge. Go beyond that and you may pay an early repayment charge, which can wipe out the saving. Your lender can also choose whether an overpayment shortens the term or lowers the monthly payment, so ask for the term to be shortened if you want the full effect. This calculator assumes your normal payment stays the same and the term shortens.

Example

A £200,000 mortgage at 4.5% over 25 years costs about £1,112 a month and £133,500 in interest. Overpaying £200 a month saves about £36,300 of interest and clears the mortgage in 18 years and 11 months, roughly six years early.

Questions people ask

Is the rate fixed in this calculator?
Yes. It assumes one rate for the whole term. If your rate changes after a fixed deal, run it again with the new rate.
What is the 10% allowance?
Many lenders let you overpay up to 10% of the balance a year during a fixed or discounted period without charge. The exact rule is in your mortgage terms.
Should I overpay or save instead?
It depends on your mortgage rate and what savings pay. Check that you keep an emergency fund, and see our other tools to compare options.
Does it work for interest-only mortgages?
No. It is built for repayment mortgages, where each payment also reduces the balance.
Is this financial advice?
No. It is a calculator for general guidance. Speak to your lender or a regulated adviser before making decisions.

Disclaimer

This tool is for general information only. It is not financial, tax, investment or legal advice, and results are estimates that may differ from your bank, lender or tax authority. Rates, limits and tax rules change. Bank and brand names are used only to describe what the tool does; they belong to their owners and we are not affiliated with them. Check the figures with a qualified professional or your provider before you decide. You use this tool at your own risk, and TheFreeTool is not liable for any loss that follows. Read the full disclaimer

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