Mortgage Overpayment Calculator

See how much you could save by overpaying your mortgage. Enter your details below to find out how many years you could shave off and how much interest you will save.

Overpaying your mortgage is one of the simplest ways to save money over the life of a loan. Even a modest regular overpayment can knock years off your term and save tens of thousands in interest — and most UK lenders allow overpayments of up to 10% of the outstanding balance each year without penalty.

The key is compound savings. When you reduce your balance, every subsequent month's interest charge falls. Over 20 or 25 years, that snowball effect becomes substantial. For example, overpaying £200 per month on a £200,000 mortgage at 5% could save over £40,000 in interest and clear the loan nearly 7 years early.

The Financial Conduct Authority reported that 1.6 million UK mortgage holders were on their lender's standard variable rate in Q3 2024 (FCA). For those borrowers especially, overpaying can deliver significant savings.

How this calculator works

  1. Enter your outstanding balance, current interest rate, and remaining term.
  2. Set a monthly overpayment amount or a one-off lump sum.
  3. The tool shows how many years and months you will save, the total interest saved, and a month-by-month amortisation comparison.

Written by the CalcStack team · Last updated April 2026

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Check your mortgage terms for Early Repayment Charges. Most lenders allow up to 10% overpayment per year without penalty.

Frequently asked questions

How much can I overpay on my mortgage?▾
Most lenders allow you to overpay up to 10% of your outstanding balance per year without penalty. Check your mortgage terms — some allow more, and some charge Early Repayment Charges (ERCs) if you exceed the limit.
Is it worth overpaying my mortgage?▾
If your mortgage rate is higher than your savings rate, overpaying is often worthwhile. For example, overpaying a 5% mortgage effectively gives you a 5% guaranteed return — better than most savings accounts.
Should I reduce the term or the payment?▾
Reducing the term saves more interest over the life of the mortgage. Reducing the monthly payment improves cash flow now. Most overpayments automatically reduce the term while keeping payments the same.
What is an Early Repayment Charge?▾
An ERC is a fee charged if you repay more than your lender allows (typically 10% per year). ERCs are common during fixed-rate periods and can be 1-5% of the amount overpaid. Always check before making large overpayments.
Should I overpay or invest instead?▾
If your mortgage rate is below expected investment returns (historically 7% for stocks), investing may produce higher returns — but with more risk. Overpaying your mortgage is risk-free. Consider your risk tolerance and ISA allowance.
Can I get my overpayments back?▾
Some lenders offer a "borrow back" facility. Others do not — once overpaid, the money is locked in your property equity. Check your lender's policy before overpaying, especially if you may need the funds later.
Does overpaying affect my tax?▾
Mortgage overpayments have no direct tax implications for your main residence. For buy-to-let properties, mortgage interest relief rules may affect the relative benefit of overpaying vs. using the money elsewhere.
What about lump sum vs monthly overpayments?▾
A lump sum overpayment saves more interest if made early because it reduces the balance immediately. Monthly overpayments spread the impact over time. Both are beneficial — use whichever suits your cash flow.
Should I overpay during a fixed rate period?▾
Yes, if within your allowed overpayment limit. The sooner you reduce the balance, the less interest accrues. Just stay within the ERC-free allowance (usually 10% per year).
How does this affect my LTV ratio?▾
Overpaying reduces your loan-to-value (LTV) ratio, which can qualify you for better rates at remortgage. Dropping below key thresholds (e.g., 75%, 60%) can unlock significantly lower rates.

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© 2026 CalcStack — a Flavoureak UK Ltd product. This calculator provides estimates only and is not financial advice.