Mortgage Overpayment Calculator

What does this calculator assume?

• Your current deal rate is fixed for the full deal period.
• Overpayments are applied immediately each month and reduce the balance straight away.
• No early repayment charges are factored in — check your mortgage terms.
• Standard monthly repayments continue alongside the overpayments.
• Lender mid-term recalculations of monthly payment aren't modelled.

Is overpaying always a good idea?

Not always. Overpaying is most powerful when your mortgage rate is higher than what your savings could earn after tax.

If you have higher-cost debt (credit cards, loans), pay those first. If you have no emergency fund, build one before overpaying. And if your lender charges early repayment charges, only overpay up to the annual allowance — usually 10% of the balance.

What's an early repayment charge (ERC)?

A fee your lender charges if you repay more than the allowed amount during your fixed or discount deal period. Typical ERCs are 1–5% of the amount repaid above the allowance.

Most UK lenders allow 10% of the balance per year ERC-free. Always check your mortgage offer document before making big overpayments.

Should I overpay or save into a savings account?

Compare your mortgage rate to the after-tax return on savings. If your mortgage rate is 5% and you can earn 4% on savings (3.2% after basic-rate tax), overpaying gives a better effective return.

But savings stay accessible — overpayments don't, unless your mortgage has a flexible "borrow back" facility. Consider liquidity too.

Why is overpaying early in the term more powerful?

Because interest compounds. Reducing the balance early means every future month accrues less interest, and the savings stack up over the remaining term.

Overpaying £100/month for the first 5 years of a 25-year mortgage saves far more than overpaying £100/month for the last 5 years.