UK Mortgage Overpayment Calculator: Estimate Interest Savings

UK mortgage rates and overpayment rules at a glance

Average UK fixed mortgage rates reached 6% in October 2026, their highest in about three years, which makes every pound overpaid worth more. Most fixed and tracker deals let you overpay up to 10% a year without a charge; above that, an early repayment charge (ERC) of typically 1% to 5% applies to the excess.

How much will I save by overpaying my mortgage?

On a £200,000 repayment mortgage at 4.5% with 25 years left, overpaying £100 a month saves £21,141.31 in interest and clears it 3 years 6 months early. £50 a month saves £11,533.60 and 1 year 10 months. At 6.0%, the same £100 saves £32,019.83, because higher rates make overpaying worth more.

How mortgage overpayment calculations work

A repayment mortgage charges interest on the balance each month, and your payment covers that interest plus some capital. An overpayment goes straight to the capital, so every later month's interest is worked out on a smaller balance. That is why small, early overpayments save more than their face value.

The monthly payment formula

Where each payment goes

In month 1, interest is £200,000 x 4.5% / 12 = £750.00, so £361.67 of the £1,111.67 payment reduces the balance. A £100 overpayment in the same month cuts the balance by a further £100, and the next month's interest falls by 37.5p. Over 25 years those small savings compound to £21,141.31.

How the new term is worked out

The calculator repeats this month by month until the balance is zero, once with overpayments and once without. The difference in months is the time saved, and the difference in total interest is the saving. Lenders usually charge interest daily, so their figures can differ by a few pounds.

How to use the mortgage overpayment calculator

The mortgage overpayment calculator needs your balance, rate and time left, plus what you want to overpay. Everything else, including the standard monthly payment, is worked out for you.

1. Enter your outstanding balance from your annual statement or online banking, not the amount you originally borrowed.
2. Add your current interest rate and the years and months left. Enter your actual monthly payment if it differs from the standard figure shown.
3. Set your overpayments: a regular monthly amount, a one-off lump sum and the month you plan to pay it, or both.
4. Choose shorten term or lower payment. Shorten term keeps your payment and finishes sooner; lower payment keeps your end date and reduces the payment.
5. Open the rate change and ERC options to model your fix ending and your lender's yearly allowance and charge.
6. Read the result: interest saved, time saved, mortgage-free date, any charges and a year-by-year balance. The tools below check an ERC and compare overpaying with saving.

How much could you save by overpaying your mortgage?

How much you save by overpaying depends on your rate, balance and time left. On a £200,000 mortgage with 25 years left, £100 a month saves £21,141.31 at 4.5% and £32,019.83 at 6.0%. Doubling the overpayment does not double the saving, because a shorter mortgage leaves less interest to save.

At 4.5%, a typical existing fixed rate

At 6.0%, the October 2026 average new fix

Monthly overpayments vs lump-sum overpayments

A lump sum saves more per pound than monthly overpayments, because it cuts the balance straight away and saves interest for longer. A £12,000 lump sum now saves £22,705.98 on the example mortgage, more than £100 a month for 21 years 6 months, which adds up to £25,700 and saves £21,141.31.

Monthly overpayments are easier to fit into a budget and can be stopped if money gets tight, while a lump sum cannot usually be taken back. Many people do both: a regular amount plus any bonus or inheritance. Keep a lump sum within your yearly allowance, or split it across mortgage years, to avoid charges.

Shorten your term or lower your monthly payment?

Shortening your term saves far more interest than lowering your payment. On the example, £100 a month used to shorten the term saves £21,141.31; used to lower the payment it saves £9,499.11, with the payment falling from £1,111.67 to £1,104.92 after a year and £1,034.56 after ten.

Lowering the payment gives you flexibility and cheaper monthly costs if your income falls. Some lenders reduce your payment automatically after an overpayment, others keep it and shorten the term, and some only change it at the next rate review, so tell your lender which you want.

Check your mortgage overpayment allowance

Your overpayment allowance is the amount you can overpay each year during a fixed or tracker deal without an early repayment charge, usually 10%. Lenders measure it differently: some use the balance at the start of the year, some the original loan, some the calendar year and some the mortgage year, and unused allowance does not normally roll over.

On a £200,000 balance a 10% allowance is £20,000 a year, or £1,666.67 a month. Once your deal ends and you move to the standard variable rate, most lenders allow unlimited overpayments. Your allowance is in your mortgage offer, annual statement or online account.

Early repayment charges explained

An early repayment charge (ERC) is a fee for repaying more than your allowance, or the whole mortgage, during a fixed or discounted deal. It is usually a percentage of the amount repaid that falls each year. Under FCA rule MCOB 12.3, an ERC must be expressed as a cash amount and be a reasonable pre-estimate of the lender's costs.

The charge only applies to the excess: overpaying £30,000 on a £200,000 balance with a 10% allowance and a 3% ERC costs 3% of £10,000, or £300. Repaying the whole balance usually ignores the allowance, so the charge is on everything: £6,000 at 3%. Waiting until a lower ERC year, or until the deal ends, can avoid it entirely; most lenders also let you port the mortgage to a new home without the charge.

What happens when your fixed rate ends

When your fixed rate ends you move to your lender's standard variable rate, averaging 7.13% in October 2026, unless you switch to a new deal. If the example mortgage moves from 4.5% to 6.0% after two years, the payment rises from £1,111.67 to £1,277.07 and total interest from £133,498.10 to £179,147.91.

Overpaying before your fix ends lowers the balance that is repriced, and can move you into a lower loan-to-value band, where rates are cheaper: Moneyfacts' best 60% LTV rates are well below average. Tick "My rate changes" in the calculator to see the effect; with the rise to 6.0%, £100 a month saves £31,849.99.

Worked examples

Each example comes from the same month-by-month calculation the calculator uses.

When overpaying may not be the best option

Overpaying gives a certain return equal to your mortgage rate, but it ties money up in your home. It is usually worth checking these first.

1. Emergency savings. Keep a cash buffer you can reach; overpayments usually cannot be taken back.
2. More expensive debts. Credit cards at around 21.55% or overdrafts cost far more than a mortgage, so clear them first.
3. Employer pension matching. Extra pension contributions an employer matches, with tax relief, often beat overpaying.
4. Savings rates. If savings earn more than your mortgage rate after tax, saving can win; the tool below compares them.
5. Charges. An ERC can wipe out the saving on a large overpayment during your deal.
6. Upcoming costs. A car, wedding or home repair may need cash you would otherwise borrow at a higher rate.

How we calculate your estimate

The calculator works in whole pence. Each month it adds interest at the annual rate divided by 12, rounded to the penny, takes off the payment (rounded up to the penny, as lenders do) and then any overpayment. It runs once without overpayments and once with them, and compares the results.

The rate is fixed unless you add a rate change; fees, insurance, payment holidays, daily interest, offset and interest-only mortgages are not modelled. The allowance is measured on the balance at the start of each mortgage year and ERCs are charged only on the excess during the charge period you enter.

Common mortgage overpayment mistakes

The most expensive mortgage overpayment mistake is paying over your allowance during a fixed deal. These are the others that catch people out.

1. Going over the 10% allowance. On £30,000 against a £20,000 allowance at 3%, that costs £300.
2. Not telling the lender what you want. Your payment may fall instead of your term shrinking.
3. Overpaying with your emergency fund. Most overpayments cannot be withdrawn.
4. Overpaying while carrying card debt. Clear 20%-plus debts first.
5. Using the original loan, not today's balance. The saving depends on what you still owe.
6. Forgetting the rate change. Overpaying before a fix ends reduces the balance that gets repriced.