See how much interest you save and how many years you cut by overpaying your mortgage
Your current mortgage
Your overpayment
| Standard monthly payment | — |
| Monthly overpayment | — |
| Lump sum overpayment | — |
| Standard total interest | — |
| Overpayment total interest | — |
| Interest saved | — |
| Time saved | — |
| Year | Std balance | Std interest | Overpay balance | Overpay interest |
|---|
Every pound you overpay reduces your outstanding mortgage balance. Because mortgage interest is calculated on the remaining balance, a lower balance means less interest accrues each month — and that saving compounds over the entire remaining term of the mortgage.
This is why even modest regular overpayments can save thousands. The earlier in the mortgage term you overpay, the greater the benefit — because you reduce the base on which all future interest is charged.
Both approaches work. A regular monthly overpayment reduces the balance steadily and is sustainable on most budgets — even £50/month makes a measurable difference over a 20-year term. A lump sum (from a bonus, inheritance or savings) immediately reduces your balance, cutting all future interest on that amount. You can combine both in the calculator above.
Most UK lenders on fixed-rate deals allow overpayments of up to 10% of the outstanding balance per year without an Early Repayment Charge (ERC). On a £200,000 mortgage, that is £20,000 per year — far more than most people need. Tracker and standard variable rate (SVR) mortgages typically have no overpayment limit. Always check your mortgage offer before overpaying.
Different lenders handle this differently. Some automatically recalculate your monthly payment downward (keeping the same term), which reduces your ongoing commitments. Others keep the monthly payment the same and instead shorten the term. To maximise interest savings, you want the latter — ask your lender to confirm.
If your mortgage rate is higher than the after-tax return on savings, overpaying saves more. With mortgage rates at 4–5% and easy-access savings at similar levels, the comparison is close. The key difference: mortgage interest savings are risk-free and guaranteed, whereas savings rates can fall. Higher-rate taxpayers also pay tax on savings interest, reducing the net return. Read our guide: Should you overpay debt or save?