This mortgage overpayment calculator helps you see how even small additional payments can help you pay off your mortgage years faster in the UK. See how much faster you will pay off your mortgage in addition to the amount you would save in interest over that period of time. Overpaying your mortgage is one of the most effective ways to reduce your total interest bill and become mortgage-free sooner.
What Are Mortgage Overpayments and Why Do They Matter?
A mortgage overpayment is any payment you make on top of your regular monthly mortgage payment. Overpayments can be made as a one-off lump sum or as regular extra payments. By reducing your outstanding balance faster, you pay less interest overall and can clear your mortgage years ahead of schedule. This can save you thousands of pounds over the life of your loan.
How Much Can Overpayments Save?
Overpaying your mortgage is one of the most powerful ways to save money and become debt-free faster. Even small regular overpayments can cut years off your mortgage and save you tens of thousands in interest. The earlier you start, the bigger the impact, as more of your payment goes towards reducing the principal from the outset.
Overpayment Savings Table
The table below shows how different regular overpayments affect two common mortgage sizes at 5% over 25 years:
| Mortgage Size | Extra Monthly | Years Saved | Interest Saved |
|---|---|---|---|
| £150,000 | £0 | 0 | £113,000 |
| £150,000 | £50 | 1.9 | £8,400 |
| £150,000 | £100 | 3.5 | £13,800 |
| £150,000 | £200 | 5.7 | £22,400 |
| £200,000 | £0 | 0 | £150,700 |
| £200,000 | £50 | 2.2 | £11,200 |
| £200,000 | £100 | 3.9 | £18,400 |
| £200,000 | £200 | 6.3 | £29,900 |
| £300,000 | £0 | 0 | £226,000 |
| £300,000 | £100 | 3.9 | £27,600 |
| £300,000 | £200 | 6.3 | £44,900 |
| £300,000 | £500 | 10.5 | £82,200 |
Figures are approximate and for illustration only. Actual savings depend on your lender, interest rate, and mortgage terms.
Example: Comparing No Overpayment, Regular Overpayment, and Lump Sum
Suppose you have a £200,000 mortgage at 5% over 25 years:
- No overpayment:
- Monthly payment: £1,169
- Total interest: £150,700
- Mortgage term: 25 years
- £100/month overpayment:
- Mortgage paid off in ~21 years
- Total interest: £132,300
- Interest saved: £18,400
- £10,000 lump sum in year 1:
- Mortgage paid off in ~23 years
- Total interest: £134,900
- Interest saved: £15,800
Combining regular and lump sum overpayments can have an even greater effect.
Key Takeaways
- Overpayments have the biggest impact early in your mortgage, when your balance is highest.
- Even small extra payments add up to big savings over time.
- Check your lender’s rules to avoid penalties and make sure overpayments reduce your principal.
Example: How Overpayments Work
Suppose you have a £200,000 mortgage at 5% over 25 years. Your standard monthly payment is about £1,169. If you pay an extra £100 per month:
- You’ll pay off your mortgage about 4 years early
- You’ll save over £18,000 in interest
Lump sum overpayments work similarly—making a one-off payment (e.g., £5,000) can also reduce your term and interest bill.
Regular vs Lump Sum Overpayments
There are two main ways to overpay:
- Regular overpayments: Adding a set amount to your monthly payment. This steadily reduces your balance and interest.
- Lump sum overpayments: Making a one-off payment (e.g., from a bonus or inheritance). This gives an immediate reduction in your balance and future interest.
Both methods are effective, and you can use them together for maximum impact.
Tips for Making the Most of Overpayments
Before making overpayments, consider these tips to maximise your savings and avoid pitfalls:
- Check your lender’s overpayment policy—most allow up to 10% of the balance per year without penalty
- Specify that extra payments go towards reducing the principal, not just future payments
- Time lump sum payments early in the mortgage for the biggest interest savings
- Review your budget to see what you can afford to overpay regularly
- Compare overpaying your mortgage to other uses for your money (e.g., investing in an ISA)
Always check for early repayment charges before making large overpayments.
Frequently Asked Questions
Is there a limit to how much I can overpay? Most lenders allow up to 10% of your outstanding balance per year without penalty, but check your mortgage terms.
Will overpayments reduce my monthly payment or my mortgage term? Usually, overpayments reduce your mortgage term, but you can ask your lender to recalculate your monthly payment if you prefer.
Are there penalties for overpaying? Some mortgages have early repayment charges if you overpay above the allowed limit. Always check before making large payments.
When is the best time to make overpayments? The earlier in your mortgage you overpay, the more interest you’ll save.
Should I overpay my mortgage or invest? It depends on your financial goals and the returns you could get elsewhere. Overpaying is risk-free and guaranteed, but investing may offer higher returns (with more risk).
How this mortgage overpayment calculator works
This UK mortgage overpayment calculator helps to calculate how much faster you will be mortgage free when overpayments are made in addition to your regular mortgage payments. You will have to input your total mortgage amount, the mortgage interest rate that you have on your mortgage as well as the amortization period. Then add in the additional overpayments you expect to make, either as a one-time lump sum or regular additional payments.
This will help calculator how much faster you will be able to pay off your UK mortgage. Since you will repay the principal of the loan faster than initially expected, you will also save on the interest expense that would have otherwise been charged on the balance of the loan.
What to consider before making overpayments
Ensure that your lender allows you to make overpayments on your mortgage payment to avoid incurring any additional penalties. You should also consult your lender to see how additional overpayments will impact your mortgage balance and the total time it takes to pay off your mortgage. You will also need to ensure that additional payments go towards reducing the debt outstanding on your mortgage to benefit from any overpayments that will be made.
Since the money that you are using as additional payments to your mortgage could be used to invest elsewhere, it is important to understand how this money could be invested otherwise, such as in a Individual Savings Account (ISA).