What does overpaying save you?
See how regular overpayments — or a one-off lump sum — cut years off the mortgage and slash the interest.
Your mortgage
The effect
Models your initial rate for the fixed period, then the revert rate for the rest of the term. Many lenders cap penalty-free overpayments at around 10% of the balance a year — check your deal.
Why £200 a month removes years
Every overpaid pound goes straight at the loan balance, and every pound of balance that disappears stops charging interest for the rest of the term. On a £200,000 mortgage at 4.5%, £200 a month saves £57,384 of interest and finishes five years and one month early. The mechanism is compound interest running in reverse: your money attacks the same machine that was working against you, which is why modest, boring, monthly overpayments produce such immodest totals.
The rules of the game
Most fixed deals allow 10% of the balance in overpayments each year without penalty; beyond that, early repayment charges of a few percent can wipe out years of benefit in one go, so know your allowance before sending a lump sum. The other choice is what the overpayment buys: a shorter term, which maximises interest saved, or a lower payment, which banks the benefit as monthly breathing room. Same money in, different shape out, and the toggle above prices both.
Should the money go here at all
An overpayment earns your mortgage rate, guaranteed and tax-free. Against a 4.5% loan that beats most savings accounts after tax, loses to clearing any credit card, and fights a close contest with long-run investing. The debt or invest calculator referees that last one properly, and if your fix is ending soon, run the mortgage calculator at the new rate first: a smaller balance at remortgage time also means better loan-to-value pricing, a second saving this page doesn't even count.
Common questions
Is it worth overpaying my mortgage?
Overpaying is a guaranteed, tax-free return equal to your mortgage rate — if that beats what you’d earn on savings or investments after tax, overpaying wins. It also cuts the total interest and can take years off the term. The main things to weigh are your early-repayment-charge allowance and keeping an emergency fund.
How much can I overpay without a penalty?
Most fixed-rate deals let you overpay up to around 10% of the balance each year penalty-free; go over during the fixed period and you can trigger an early repayment charge. Once you’re on the lender’s variable revert rate there’s usually no limit. The calculator flags when your overpayments exceed the allowance you enter.
Should I shorten the term or lower the payment?
Shortening the term keeps your payment the same and clears the mortgage sooner, saving the most interest. Lowering the payment uses a lump sum to reduce the balance and re-spreads it over the same term, easing monthly cost instead. The calculator shows both.
These results are estimates for general information only and are not financial advice. Property decisions have real consequences — check every figure and take appropriate professional advice before acting. Read the full disclaimer.