Mortgage Overpayment Calculator
See how much you save by overpaying your mortgage. Calculate interest saved, months shaved off your term, compare lump sum vs monthly strategies, and check your 10% annual ERC-free allowance.
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How to Use This Calculator
Overpayment Savings tab
Enter your outstanding mortgage balance, interest rate, remaining term, and monthly overpayment amount. The calculator shows how many months you shave off your mortgage, how much interest you save, and your new mortgage-free date. A balance comparison table shows how your equity builds faster with overpayments at key milestones.
Lump Sum vs Monthly tab
Compare two overpayment strategies: a one-off lump sum applied immediately vs regular monthly overpayments over the remaining term. See which saves more interest, which shortens your term by more, and the total cost of each approach. Useful when you receive a bonus, inheritance, or savings windfall.
10% Allowance Check tab
Enter your current balance and planned annual overpayment to check if you are within the standard 10% ERC-free allowance. If you exceed it, the calculator estimates the early repayment charge (ERC) at different rates from 1% to 5%, and suggests splitting the overpayment across mortgage years.
Share your result
Every input is encoded in the URL. Click Share to send your exact scenario to a partner, mortgage adviser, or save it for later.
The Formula
Mortgage overpayment savings are calculated using standard amortization mathematics:
Where:
P = outstanding mortgage balance
r = monthly interest rate (annual rate ÷ 12)
n = remaining term in months
With overpayment:
Each month, you pay (Monthly Payment + Overpayment)
The extra goes directly to reducing the principal
New balance = Previous Balance + Interest − Payment − Overpayment
Interest Saved = Total Interest (without) − Total Interest (with overpayment)
Months Saved = Original Term − New Term
The key insight is that overpayments reduce your principal, which means less interest accrues each month. Over time, this compounds: as your balance drops faster, an ever-larger share of each payment goes to principal rather than interest, accelerating the payoff.
For offset mortgages, the effect is similar — your savings balance is offset against the mortgage, reducing the amount on which interest is charged. The mathematical result is equivalent to making regular overpayments, but you retain access to your savings.
Example
Sarah — Nurse, 32, Birmingham
Sarah has a £180,000 repayment mortgage at 4.5% fixed over 25 years. She decides to overpay £200 per month on top of her regular payment.
Overpayment Savings tab
By overpaying just £200 per month, Sarah becomes mortgage-free 6.6 years earlier and saves over £35,000 in interest. Her total interest drops from approximately £120,150 to £84,970.
10% Allowance Check
Sarah checks her annual overpayment: £200 × 12 = £2,400 per year. Her 10% allowance is £180,000 × 10% = £18,000. She is well within the limit — no ERC applies.