Mortgage Overpayment Calculator
On a £150,000 mortgage at 4.5% over 240 months, a £100 monthly overpayment saves about £12,413 in interest and cuts the term by 34 months. Enter your own balance, rate and overpayment to see the exact figures, with the penny-reconciled schedule shown.
This answers what a monthly or lump-sum overpayment does to the interest you pay and the time you stay on the mortgage. Early-repayment charges, lender allowances and the choice between cutting the term and lowering the payment are covered below.
Most lenders allow up to 10% of the balance in overpayments each year without an early-repayment charge.
Within your £10,000 allowance and £3,800 headroom left.
Common questions
Can I overpay my mortgage without a penalty?
Most UK lenders let you overpay up to 10% of the outstanding balance each year without an early-repayment charge (ERC). Over that limit you usually pay an ERC, often 1% to 5% of the amount overpaid, depending on your deal. Check your mortgage offer or ask your lender for your exact allowance.
Should I cut the term or lower the payment?
If you keep the payment the same and let the overpayment reduce the balance, the term shortens and you save the most interest. If you recast the mortgage so the payment drops instead, your monthly cost falls but the term stays the same and you save less interest overall. The calculator shows both options side by side.
Does the lender have to apply my overpayment?
Your lender should apply an overpayment in line with your instructions and the terms of your mortgage. If you want it to reduce the balance rather than sit in a reserve, say so when you make it, and check your next statement confirms it was applied as you asked.
How mortgage overpayments are worked out
On a £150,000 mortgage at 4.5% over 240 months, a £100 monthly overpayment saves about £12,413 in interest and cuts the term by 34 months.
By Mike, the developer behind ukmoneycalc. Every figure here is recomputed in code from the same engine the calculator runs, not typed by hand. The engine simulates the mortgage month by month, charging interest on the outstanding balance and applying your overpayment to the principal, then reconciles every row to the penny so the schedule you see is the schedule that produced the headline figures.
Each month the interest is charged on the balance you still owe, so an overpayment that reduces the principal also reduces the interest charged on every later month. That is why a £100 monthly overpayment on this example saves £12,413 of interest over the life of the mortgage, not just £24,000 of payments moved earlier. The compounding effect is the whole point of overpaying.
A lump sum works the same way but in one step. Paying it now rather than in twelve months means the balance is lower for those twelve months, so you save the interest that would have accrued on it. The calculator shows the cost of delaying a lump sum by a year, which is the interest you give up by waiting.
Early-repayment charges and the 10% allowance
The most common UK allowance is 10% of the outstanding balance per year, but it varies by lender and deal. Overpaying beyond your allowance usually triggers an ERC, often 1% to 5% of the amount overpaid. The calculator's allowance check compares your overpayments against the allowance you enter and shows the headroom or the excess, so you can see whether a lump sum would push you into a charge.
What £100 a month does to a £150,000 mortgage at 4.5% over 240 months
| Scenario | Term | Total interest | Monthly payment |
|---|---|---|---|
| No overpayment | 240 months | £77,754 | £948.97 |
| With £100/month | 206 months | £65,341 | £1,048.97 |
| You save | 34 months | £12,413 | n/a |
Every figure is computed by the same engine the calculator runs, which simulates the mortgage month by month and reconciles the schedule to the penny. The monthly payment assumes the overpayment is added on top of the scheduled payment, so the term shortens rather than the payment dropping.