Updated 28 August 2026
Mortgage Overpayment Calculator UK
Overpaying is the highest guaranteed return most UK households can get: every pound you pay early stops earning interest for the lender at your mortgage rate, tax free. This calculator shows the two numbers that matter: how many years come off your term, and how many thousands stay in your pocket.
- Monthly, annual or lump sum
- Years saved and interest saved
- 10% ERC allowance check
- Overpay vs save comparison
Your overpayment plan
What your overpayments achieve
Interest saved
£0
Time saved
n/a
Mortgage-free in
n/a
New monthly payment
£0
Normal payment + overpayment
Total overpaid
£0
Extra capital you contribute
Return on that money
£0
Saved per £1 overpaid
Annual ERC allowance
£0
Typically 10% of the balance
- Interest saved by overpaying £0
- Interest you still pay £0
- Interest without overpaying £0
Balance with and without overpayments
Year-by-year with your overpayments
| Year | Interest | Normal capital | Overpaid | Balance |
|---|
How much difference does overpaying really make?
Using a £220,000 balance at 5.09% with 24 years left, here is what different monthly overpayments do. The pattern is worth noticing: the first £100 buys the most, but the gains keep compounding well beyond that.
| Extra per month | Mortgage-free in | Years saved | Interest saved |
|---|
Before you start overpaying, check these five things
- Your early repayment charge allowance. Most fixed deals let you overpay 10% of the outstanding balance each year penalty-free. Go over it and the ERC is typically 1 to 5% of the excess. The calculator shows your 10% figure above, but check your own offer document, because some lenders base it on the original loan, not the current balance.
- Whether the overpayment reduces the term or the payment. This is the single most expensive detail. Reducing the term keeps your payment the same and saves far more interest. Reducing the payment feels nice and saves much less. Some lenders default to the wrong one, so tell them explicitly.
- Your emergency fund. Money paid into a mortgage is very hard to get back out. Three to six months of essential spending in an accessible account comes first.
- Higher-rate debt. Credit cards at 24% and car finance at 12% should be cleared before a 5% mortgage. Always attack the highest rate first.
- Pension contributions. A higher-rate taxpayer gets 40% relief on pension contributions. That usually beats a 5% guaranteed return, especially with employer matching on top.
Why early overpayments are worth so much more. In year one of a 25-year mortgage, roughly 71% of your payment is interest. By year 20 it is down to about 25%, and in the final year barely 3%. An overpayment in year one avoids interest on that money for 24 more years; the same overpayment in year 20 avoids five years of it. If you can only overpay for a while, do it as early as you can.
Overpayment questions, answered
Should I reduce the term or the monthly payment?
Reduce the term if you can afford to. Keeping the payment the same and shortening the term saves substantially more interest, because your payment stays at its original level while the balance falls faster. Reducing the payment lowers your monthly outgoing but leaves the term intact, so most of the interest saving disappears. Many lenders apply overpayments as a payment reduction by default, so ask them in writing to reduce the term instead.
How much can I overpay without a penalty?
Most fixed-rate deals allow 10% of the balance per year without an early repayment charge, though some allow 20% and a few allow nothing at all. Trackers and standard variable rates usually have no ERC. Check your mortgage offer document under “early repayment charge”, and note whether the 10% is calculated on the balance at the start of the year or on the original loan amount, because that changes the figure meaningfully.
Is overpaying better than putting money in savings?
Compare like for like. An overpayment gives you a guaranteed, tax-free return equal to your mortgage rate. At 5.09%, a basic-rate taxpayer would need a savings account paying more than 6.3% gross to match it, and a higher-rate taxpayer would need over 8.4%. Savings accounts at those levels do not exist in August 2026 with base rate at 3.75%. The counter-argument is liquidity, not return, because savings can be withdrawn, overpayments generally cannot.
Can I get overpayments back if I need the money?
Usually not automatically. Some lenders offer a “borrow back” or flexible facility that lets you withdraw overpayments, and offset mortgages keep the money in a linked savings account you can access at any time. On a standard mortgage, once you have overpaid, the money is in the property. This is why the emergency fund comes first.
Does overpaying affect my remortgage?
Positively. A lower balance means a lower loan to value, which can move you into a cheaper rate tier. Dropping from 85% to 80% LTV, for example, typically saves a visible margin on your next deal. If you are close to a threshold before your deal ends, a targeted lump sum can pay for itself in the rate alone. Model your next deal on the remortgage calculator.