How to use
- Enter what you still owe on your mortgage, your interest rate and how many years are left. Your latest annual mortgage statement has all three.
- Enter how much extra you could pay each month, and any one-off lump sum, with the month you would pay it (month 1 is next month).
- Choose Shorter term to keep paying the same and finish sooner, or Lower payments to keep the same end date and pay less each month.
You get the interest saved, the new term or payment, a side-by-side comparison of both options, and a year-by-year repayment schedule. Download PDF gives you the full month-by-month schedule.
How it is calculated
Interest is charged monthly at the yearly rate ÷ 12. Your normal monthly payment on a repayment mortgage is:
Payment = balance × r ÷ (1 − (1 + r)^−n), where r is the monthly rate and n is the number of months left.
- Shorter term: you keep paying the same amount plus the overpayment. All of the overpayment reduces the balance, so the mortgage is cleared early.
- Lower payments: after every overpayment, the payment is recalculated from the new balance over the months that are left, so the end date stays the same.
- Interest saved = total interest with no overpayment − total interest with overpayments.
The calculator also checks your overpayments in the first 12 months against 10% of the balance, the usual limit before an early repayment charge.
Examples
A £200,000 repayment mortgage at 4.5% with 25 years left costs £1,111.66 a month and £133,499 in interest. Overpaying each month and keeping the payment the same:
| Extra each month | Interest saved | Mortgage-free sooner by |
|---|---|---|
| £50 | £11,534 | 1 year 10 months |
| £100 | £21,142 | 3 years 6 months |
| £200 | £36,280 | 6 years 1 month |
| £500 | £63,887 | 11 years |
A single £10,000 lump sum in month 12 saves £18,072 and cuts 2 years 1 month off the term. Used to lower the payment instead, it saves £6,371 and brings the payment down to about £1,054.82 a month for the rest of the term.
Before you overpay
- Check the early repayment charge. Most deals allow 10% a year; anything over that can cost 1–5% of the excess.
- Keep savings for emergencies. Money paid into your mortgage is hard to get back.
- Clear dearer debts first. Credit cards and personal loans usually cost more than a mortgage.
- Compare with savings rates. If a savings account or cash ISA pays more than your mortgage rate after tax, saving may come out ahead.