Use our free mortgage overpayment calculator to see how much interest you could save by paying a little extra. Enter your balance, rate and term, add a monthly overpayment or lump sum, and see how soon you could be mortgage free.
See how much interest you could save and how much sooner you could be mortgage free.
Assumes a repayment mortgage with interest charged monthly and the same rate for the whole term. Real deals change rate when a fix ends. Check your lender’s overpayment limits and early repayment charges first. Moving home soon? See how porting a mortgage lets you keep your current deal. For illustration only, not financial advice. | iceburgwealth.com
How to Use the Mortgage Overpayment Calculator
Step 1: Enter Your Mortgage Details
Add your current balance, interest rate and the years left on your mortgage. You can find these on your annual mortgage statement or in your lender’s app.
Step 2: Add Your Overpayments
Enter a regular monthly overpayment, a one off lump sum, or both. The mortgage overpayment calculator then shows how much interest you save and how much sooner you could be mortgage free.
How Much Can Overpaying Your Mortgage Save?
Here are some examples on a £200,000 repayment mortgage at 4.5% with 25 years left. The normal payment is about £1,112 a month.
| Monthly overpayment | Interest saved | Mortgage free sooner by |
|---|---|---|
| £100 | About £21,100 | About 3 years 6 months |
| £200 | About £36,300 | About 6 years 1 month |
| £500 | About £63,900 | About 11 years |
Overpayments work because they cut the balance that interest is charged on. Every pound you overpay saves interest for the rest of the term.
Check Your Overpayment Limit First
Most fixed and tracker deals let you overpay up to 10% of your balance each year without a fee. Go over that limit and you could face an early repayment charge, often a few percent of the extra amount. The calculator warns you if your plan goes above 10% in the first year.
You can also choose whether overpayments shorten your term or lower your monthly payment. Shortening the term usually saves the most interest.
Should You Overpay Your Mortgage or Invest?
Overpaying gives you a guaranteed, tax free return equal to your mortgage rate. Investing might earn more over the long run, but with no guarantee. Before you overpay, clear expensive debts and build an emergency fund, as money paid into your mortgage is hard to get back.
Our guide on whether you should pay off your mortgage early weighs up the pros and cons, and our post on UK mortgage rates covers where rates are heading.
How to Make a Mortgage Overpayment
Step 1: Check Your Allowance
First, look at your mortgage offer or call your lender to confirm how much you can overpay each year without a fee. On many deals it is 10% of the balance, but some are lower.
Step 2: Choose Monthly, Lump Sum or Both
Next, decide how you want to pay. A regular monthly overpayment is easy to set and forget. A lump sum, for example from a bonus, cuts the balance in one go.
Step 3: Tell Your Lender What You Want It to Do
Then ask your lender whether the overpayment should shorten your term or lower your monthly payment. If you say nothing, some lenders automatically lower the payment instead.
Step 4: Check It Has Been Applied
Finally, check your next statement or app to make sure the balance has dropped. Then run the mortgage overpayment calculator again to see your new mortgage free date.
When Overpaying Might Not Be the Right Move
Overpaying is a great habit, but it is not always the best use of spare money. It is usually worth sorting these first:
- Expensive debts such as credit cards, which cost far more than your mortgage
- An emergency fund of three to six months of essential costs, because money in your mortgage is hard to get back
- Your workplace pension, if your employer would match extra contributions
- Savings accounts paying more than your mortgage rate after tax
Also, if your fixed deal ends soon, check any early repayment charges before paying in a large lump sum. Waiting until the new deal starts can sometimes avoid a fee.
Mortgage Overpayment Calculator FAQs
Does It Work for Interest Only Mortgages?
No. It assumes a repayment mortgage, where each payment covers interest and some of the balance.
What If My Rate Changes?
The calculator uses one rate for the whole term. When your fixed deal ends, run it again with your new rate to see the updated picture.
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