Mortgage Overpayment Calculator

On a £200,000 mortgage at 5.5% with 25 years remaining, paying an extra £100 a month saves around £33,000 in interest and clears the mortgage 4 years and 2 months early. £200 a month extra saves around £58,000 and clears it 7 years and 3 months early. £500 a month extra saves around £104,000 and clears it nearly 13 years early. The bigger the rate and the earlier in the term, the more dramatic the saving.

The reason small overpayments produce such large savings is that mortgage interest is front-loaded. In year one of a 25-year £200,000 mortgage at 5.5%, roughly 80% of each monthly payment is interest and only 20% reduces the balance. An overpayment goes 100% to the balance, so a £100 overpayment in year one is worth around five times as much, in capital reduction terms, as the principal portion of a normal payment. Every overpayment in the early years compounds by avoiding decades of future interest on that capital.

Most UK fixed-rate mortgages allow you to overpay up to 10% of the outstanding balance per year without penalty. On a £200,000 mortgage that is £20,000 a year of allowed overpayment, far more than most households can muster. Going above 10% triggers an early repayment charge (ERC), typically 1% to 5% of the overpayment depending on how many years are left on the fix.

Tracker and SVR mortgages usually have no overpayment limit and no ERC, but their rates are typically higher (SVRs in 2026 sit at 7% to 8% with the Bank of England base rate at 4%). If you are mid-fix at 4% and considering whether to overpay or save, the 10% allowance is normally generous enough to cover anything you would realistically pay in. The [mortgage calculator](/mortgage-calculator) is useful for modelling the original payment schedule before layering overpayments on top.

The rule of thumb most UK savers learn is 'compare your mortgage rate to the best savings rate after tax'. With a 5.5% mortgage and the best easy-access savings paying around 4.5% (3.6% net for a basic-rate taxpayer above the £1,000 personal savings allowance), overpaying clearly wins on pure rate. With a 4% fixed mortgage and the same 4.5% savings rate, saving in an ISA wins, especially because savings stay liquid while mortgage overpayments do not. The crossover point is roughly when your after-tax savings rate exceeds your mortgage rate, accounting for the personal savings allowance and your ISA capacity. The other consideration is flexibility: an offset mortgage gives you the same interest-saving effect as an overpayment but keeps the cash accessible, which is worth a 0.2 to 0.4 percentage point premium on the rate for some borrowers.