💰 UK Mortgage Overpayment Calculator
Model the interest you'll save and the years you'll cut from your mortgage term by overpaying monthly, with a lump sum, or both. ERC caveat: most UK fixes allow 10% per year before charges kick in.
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Methodology & Sources
The calculator runs the amortisation schedule twice — once at your scheduled monthly payment, once with your overpayment(s) added — and reports the difference. Monthly overpayments are applied EVERY month for the remaining term; the lump sum is applied at month 1. Most UK fixed-rate mortgages allow overpayments up to 10% of the OUTSTANDING balance per year without an Early Repayment Charge (ERC) — beyond that, you'll pay a percentage of the excess. Check your mortgage offer for the exact 10%-rule and ERC schedule before overpaying.
- FCA mortgage rules: FCA — Mortgages
- MoneySavingExpert ERC guide: MSE — Mortgage Overpayment Calculator + ERC explainer
- Bank of England base rate: BoE — Bank Rate (determines variable-rate moves)
Last verified: May 2026.
Frequently Asked Questions
How to use this calculator
Takes about 2 minutes.
- Enter your current mortgage balance, rate, and remaining term
- Enter the monthly overpayment you can afford
- Optionally add a one-off lump sum (e.g. bonus, inheritance)
- Review interest saved, years saved, and new payoff date
- Check your mortgage offer for the 10% ERC-free overpayment limit
Try these scenarios
Tap a scenario to load it into the calculator above.
Key concepts
How overpayment saves money. Every £1 overpaid goes straight against capital and reduces every future month's interest. The compound effect is enormous: £200/month on a £200k 25yr at 5% saves around £33,000 in interest AND shortens the term by 5+ years. The interest saving alone is a guaranteed risk-free 5% return on the overpayment.
The 10% ERC-free rule. Most UK fixed-rate mortgages allow overpayments up to 10% of the OUTSTANDING balance per year (not original balance) without an Early Repayment Charge. For £200k that's £20k/year. Tracker, discount, and SVR mortgages typically have no cap. Always check your offer document — penalty for breaching the cap is 1–5% of the excess.
Overpay vs invest decision. Treat the mortgage rate as the hurdle rate for your alternative investment. Mortgage at 5% means you need an after-tax expected return above 5% to make investing the better choice. Stocks & Shares ISA historically returns 6–7% real (after inflation), which BEATS most mortgage rates — but with risk. Cash ISA at 4–5% LOSES to a 5% mortgage rate. Pay-off-the-mortgage is the conservative play; invest is the higher-expected-return play.
The cash-flow trap. Overpaying ties up money. If you lose your job or face a big expense, you can't reclaim the overpayment without remortgaging (which takes 4–8 weeks and costs £500+). Most planners recommend building a 3–6-month emergency fund in an ISA or savings account BEFORE making meaningful overpayments. Overpayments aren't liquid.
Shorten term vs reduce payment. Default UK lender behaviour: keep monthly payment the same, shorten the term (saves more interest). Alternative: recalculate a smaller monthly payment over the original term (better cash flow but saves less). Most lenders need you to call to switch from shortening to reducing. For most borrowers, shortening is mathematically better.
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