Mortgage overpayment questions
How much can I save by overpaying my mortgage?
There is no single saving. It depends on the balance, the rate, the remaining term, and how much you overpay. Because interest is charged on what you still owe, a modest extra payment can save thousands and shorten the term by years.
Why a small extra grows
On a repayment mortgage the early years are mostly interest. An overpayment skips some of that interest immediately, and it also shrinks every later interest charge. The saving is the interest you never get billed, not a cashback from the lender.
The same £100 a month is worth more on a large balance, a higher rate, or a long remaining term, because those are the loans where interest would otherwise have been charged for longest. Near the end of a term, most of each instalment is already capital, so the saving is smaller.
A worked example from this calculator
Take £250,000 at 4.5% over 25 years, with no fees and the rate held constant. The contractual payment is £1,389.58 a month, and with no overpayment the loan runs for 300 months. Interest over that schedule is £166,874.
Add £200 a month from the first month, still at 4.5%, and the balance clears in 239 months. That is 61 months — five years and one month — off the term. Interest falls to £128,416, so the illustration saves £38,458. Your own loan will not match these figures unless the inputs match.
How to read your result
Use the calculator with the balance and rate on your latest statement, not the rate you started with if a fix has changed. If you can only overpay for a few years, stop the extras in your own planning — this illustration assumes the extra continues until the balance is gone.
Compare the interest saved with anything else that money could do: a higher-interest debt, a pension contribution, or cash you may need if the rate resets. The calculator does not make that trade-off. It only prices the mortgage side.
Try the figures in the calculator