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Mortgage Overpayment Calculator

Updated August 2026 Last reviewed 10 August 2026 Mortgage & Property

Overpaying a mortgage reduces the balance directly, so you pay less interest and clear the loan early.

Enter your outstanding balance, rate, remaining term and monthly overpayment to see the difference.

Your details

Results

Interest saved
£28,465.18
Term cut
7.4 years
Paid off about 89 months early
Standard monthly payment
£791.76
Total interest — standard
£87,526.58
Total interest — with overpayments
£59,061.40
Monthly payment with overpayment
£991.76

How the calculation works

We believe numbers should be transparent. Here is the formula behind this calculator.

Each month: interest is charged on the balance, and anything above it comes off the principal

Worked example

Worked example: £150,000 at 4%, 25 years, £200/month extra

Standard payment: about £792/month.
With £200 extra each month, the mortgage clears roughly 5 years early.
You save tens of thousands in interest — the exact figure depends on the rate and term.

Important assumptions

  • Assumes a fixed interest rate for the whole term.
  • Overpayments are treated as coming straight off the principal each month.
  • Most UK lenders allow overpayments up to 10% of the balance per year without penalty.

Frequently asked questions

Can I overpay my mortgage without penalty?

Most UK mortgages let you overpay up to 10% of the balance each year without an early repayment charge. Above that, fees can apply — check your mortgage terms.

Is overpaying better than saving?

Usually yes. Mortgage interest (4%+ typical) usually beats savings rates, and overpaying is tax-free. The exception is if you have higher-interest debts or your cash needed for emergencies.

Do overpayments reduce my monthly payment?

Two options: keep paying the same amount and clear the loan early (the assumption here), or reduce the payment and keep the term. Ask your lender to switch to reduce payments if you prefer that.

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Related guides

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These calculations are estimates for guidance only and are not professional financial, tax or legal advice. UK rates and rules change, so always verify important figures with official GOV.UK / HMRC information or speak to a qualified professional. See our full disclaimer.