Mortgage overpayment calculator

woman managing personal banking and finance at home

(Image credit: Getty images)

last updated 24 July 2024

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Rising mortgage rates can get homeowners thinking about overpaying their mortgage as a way to protect themselves. Many borrowers coming to the end of a fixed rate will now be faced with remortgage deals that are far higher than we've all been used to. So if you have cash to spare, you may be thinking about whether you should overpay your mortgage.

Overpaying your mortgage means you can drastically reduce the interest you pay to your lender allowing you to become mortgage-free sooner. Borrowers who overpay and reduce their mortgage's loan-to-value (LTV) may also find that they have access to a broader range of better rates when the time comes to remortgage.

Overpaying can be done as a regular monthly amount, as a lump sum or a combination of both. Most lenders let their customers repay up to 10% of their mortgage balance a year without charging an early repayment penalty – some banks allow higher overpayments.

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Our mortgage overpayment calculator helps you work out how much your monthly balance may change as a result of making overpayments and helps you decide if it is worth it.

Mortgage overpayment calculator

Overpaying can save you thousands in interest

Overpaying your home loan can have a big impact.

For a homeowner with a £300,000 mortgage on a two-year fixed rate of 5.86%, over a 25-year term, overpaying by £100 a month would save £32,930 in interest and mean you'll be mortgage-free two years and eight months early, according to the broker L&C Mortgages.

Alternatively, a one-off lump sum overpayment of £5,000 would save you £15,938 in interest and would reduce your mortgage term by 11 months.

Even if you're on a cheaper mortgage deal, overpaying can have a meaningful impact. For example, if you overpaid by £100 a month on a £300,000 mortgage, with a rate of 2.15%, you'd save £8,734 in interest and your mortgage would be paid off two years and four months sooner.

And if you used a one-off lump sum overpayment of £5,000, with the 2.15% rate you'd pay £3,496 less in interest and be mortgage-free seven months early.

Henry Sandercock has spent more than eight years as a journalist covering a wide variety of beats. Having studied for an MA in journalism at the University of Kent, he started his career in the garden of England as a reporter for local TV channel KMTV.

Henry then worked at the BBC for three years as a radio producer - mostly on BBC Radio 2 with Jeremy Vine, but also on major BBC Radio 4 programmes like The World at One, PM and Broadcasting House. Switching to print media, he covered fresh foods for respected magazine The Grocer for two years.

After moving to NationalWorld.com - a national news site run by the publisher of The Scotsman and Yorkshire Post - Henry began reporting on the cost of living crisis, becoming the title’s money editor in early 2023. He covered everything from the energy crisis to scams, and inflation. You will now find him writing for MoneyWeek. Away from work, Henry lives in Edinburgh with his partner and their whippet Whisper.

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