Mortgage Overpayment Calculator
Calculate how much you can save by making extra mortgage payments. See the impact of regular overpayments or lump sum payments on your mortgage term and total interest paid.
Your Mortgage Details
Enter your current mortgage information to calculate overpayment benefits
Your Overpayment Impact
See how overpayments will affect your mortgage
Detailed Breakdown
Understanding Overpayment Strategies
Regular Monthly Overpayments
Consistent monthly overpayments provide steady progress towards mortgage freedom. Even small amounts like £100-200 per month can save thousands in interest and reduce your term by several years.
Lump Sum Payments
One-time large payments have immediate impact on your mortgage balance. Perfect for bonuses, inheritance, or investment gains. The earlier you make them, the greater the long-term savings.
Combined Strategy
Combining regular overpayments with occasional lump sums maximizes your savings. This flexible approach adapts to your changing financial circumstances while maintaining consistent progress.
Compound Effect
Overpayments create a compound effect - you save interest on the reduced balance for the entire remaining term. This makes early overpayments particularly powerful for long-term savings.
How to Use This Calculator
Enter Mortgage Details
Input your current outstanding balance, interest rate, remaining term, and current monthly payment. Find these details on your latest mortgage statement.
Choose Overpayment Type
Select from regular monthly overpayments, one-time lump sum, or a combination of both strategies to match your financial situation.
Set Overpayment Amounts
Enter your planned overpayment amounts. Use the quick selection buttons for common amounts or enter custom values that fit your budget.
Review Results & Plan
Analyze the detailed breakdown of savings, time reduction, and new payment structure. Use this information to make informed decisions about your overpayment strategy.
Benefits of Mortgage Overpayments
Substantial Interest Savings
Overpayments directly reduce your principal balance, saving you interest for the entire remaining term. Even modest overpayments can save tens of thousands of pounds over the life of your mortgage.
Earlier Mortgage Freedom
Reduce your mortgage term by years, not just months. Becoming mortgage-free earlier provides financial security and frees up money for other goals like retirement or investments.
Guaranteed Returns
Overpaying your mortgage provides a guaranteed return equal to your interest rate, with no market risk. This makes it an attractive option compared to volatile investment markets.
Improved Financial Position
Build equity faster and improve your loan-to-value ratio. This can help you access better mortgage deals when remortgaging and provides greater financial flexibility.
Frequently Asked Questions
What's the maximum I can overpay without penalties?
Most UK lenders allow overpayments of up to 10% of your outstanding mortgage balance per year without early repayment charges. This limit typically resets annually. Some flexible mortgages offer higher limits or no restrictions. Always check your specific mortgage terms before making large overpayments.
Should I overpay my mortgage or invest the money?
This depends on your mortgage rate versus potential investment returns and your risk tolerance. Overpaying guarantees savings equal to your mortgage rate with no risk. Investing could potentially earn higher returns but carries market risk. Consider your emergency fund, other debts, and financial goals when deciding.
Can I reduce my monthly payments instead of the term?
Yes, many lenders offer the option to either reduce your mortgage term or lower your monthly payments after overpayments. Reducing the term saves more interest overall, while reducing payments improves monthly cash flow. You can often switch between these options when remortgaging.
What happens if I need the overpaid money back?
Standard mortgage overpayments are typically irreversible - you can't withdraw the money once paid. Some lenders offer flexible mortgages with 'overpayment reserves' that allow borrowing back, but these often come with higher rates. Ensure you maintain adequate emergency funds before overpaying.
When is the best time to make overpayments?
The earlier in your mortgage term, the greater the impact. However, ensure you have an emergency fund and have paid off higher-interest debts first. Good times include after receiving bonuses, inheritance, or when interest rates are high relative to investment returns.