About the UK Mortgage Overpayment Calculator
This UK mortgage overpayment calculator shows how much interest you save, and how much sooner you become mortgage-free, by paying extra each month or making a one-off lump sum. Enter your outstanding balance, interest rate and remaining term, then the overpayment you have in mind.
Most UK fixed and tracker deals let you overpay a set amount each year without an early repayment charge — commonly 10% of the outstanding balance — and charge an ERC on anything above it. The calculator checks each year of your deal against that allowance, estimates any ERC on the excess, and tells you the largest regular overpayment that stays within the limit.
It assumes your contractual monthly payment stays the same, so overpayments shorten the term (many lenders offer to reduce the payment instead, which saves less interest). The interest rate is treated as constant for the whole term; if your deal reverts to a higher rate, real savings will usually be larger. Check how your lender measures the allowance (balance at the start of the year or of the deal) in your offer.
With the default inputs, the interest saved is £35,177.33. Change any value above to recalculate instantly.
How to use the uk mortgage overpayment calculator
- 1Enter your current balance, interest rate and remaining term from your latest statement.
- 2Add a regular monthly overpayment, a one-off lump sum, or both.
- 3Enter your annual overpayment allowance (often 10%) and the years left on your deal.
- 4Enter the ERC percentage for overpayments above the allowance.
- 5Review the interest and time saved, and keep within the maximum monthly figure to avoid charges.
Formula and method
The contractual payment is found with M = P × r(1 + r)^n ÷ ((1 + r)^n − 1). The mortgage is then simulated month by month: interest is balance × annual rate ÷ 12, the payment covers that interest plus principal, and any overpayment is taken straight off the balance. Keeping the payment fixed means the balance hits zero earlier; the interest saved is the difference between total interest with and without overpayments.
For each year left on your deal, the allowance is your allowance percentage of the balance at the start of that year. Overpayments above it are charged the ERC percentage you enter. The lump sum is applied in month one, and overpayments after the deal ends are assumed to be penalty-free.
- M
- Contractual monthly payment
- P
- Outstanding balance
- r
- Monthly interest rate (annual rate ÷ 12)
- n
- Remaining term in months
Worked examples
£180k over 25 years at 4.5%, overpaying £200 a month
The normal payment is about £1,000.50. Adding £200 a month saves roughly £35,177 of interest and clears the mortgage 6 years 7 months early. £2,400 a year is well inside the £18,000 (10%) allowance, so there is no ERC.
£25,000 lump sum on a £200k mortgage
A £25,000 lump sum on a £200,000, 20-year mortgage at 5% saves about £36,346 of interest and 3 years 10 months. The allowance is 10% of £200,000 = £20,000, so the £5,000 excess incurs a 3% ERC of £150 — still a very good trade.
Overpaying £500 a month after the deal has ended
With no deal period there is no allowance or ERC. Paying £500 extra each month on £120,000 at 4% over 15 years saves about £17,980 in interest and clears the loan 6 years 5 months early.
Frequently asked questions
How much can I overpay my mortgage without a penalty?+
Most UK lenders allow overpayments of up to 10% of the outstanding balance each year during a fixed or tracker deal without an early repayment charge. Some measure it from the balance at the start of the deal, others each year — check your offer.
Is it better to overpay or save?+
Overpaying earns a guaranteed return equal to your mortgage rate, tax-free. If you can get a higher after-tax rate on savings, and you keep an emergency fund, saving may be better. Many people do both.
Should I reduce my term or my monthly payment?+
Reducing the term saves more interest because the balance falls faster for longer. Reducing the payment improves monthly cash flow. Lenders usually let you choose when you make an overpayment.
What happens if I go over the 10% allowance?+
You normally pay the early repayment charge on the amount above the allowance — for example 3% of a £5,000 excess is £150. Interest savings can still outweigh the charge, especially on a large lump sum.
Can I overpay on a standard variable rate?+
Yes. On most SVRs and follow-on rates there is no early repayment charge, so you can usually overpay as much as you like. Check whether your lender has a minimum overpayment amount.
Results are estimates for educational purposes and are not financial advice. Rates, fees and terms vary — confirm with your lender or a licensed advisor before making decisions.