Mortgage overpayment calculator: Can I pay off my home loan early?


Smart homeowners in the UK have discovered a way to save thousands of pounds and pay off their mortgages years ahead of schedule. By making overpayments on their mortgages, they can reduce their debt more quickly and lower the amount of interest they pay.

Paying off your mortgage faster

Typically, homeowners pay set monthly repayments based on the borrowing amount, interest rate, and agreed repayment period. However, paying more than the set amount can lead to faster debt clearance and reduced interest.

Overpayments can be made through lump sums or regular monthly payments. But before making overpayments, it's important to consider factors such as the maximum amount you can repay and any penalty charges that may apply.

Is it the right choice for me?

Overpaying on your mortgage can reduce your loan and lower the amount of interest paid. It also provides the opportunity to underpay in the future, but it's crucial to check your lender's policy regarding this. Additionally, overpaying can lower your loan-to-value (LTV) ratio, making it easier to access cheaper deals when remortgaging. However, be aware that lenders usually charge a penalty if you overpay beyond a certain limit, which is typically 10% of the total mortgage balance per year.

Overpaying on an SVR (standard variable rate) mortgage, on the other hand, usually does not incur penalty charges. It's always wise to check with your lender before making any overpayments.

A general rule of thumb is that overpaying is cost-effective if your mortgage has a higher interest rate than what you can earn on your savings after tax. If your savings have a higher interest rate than your mortgage, it may be better to focus on saving instead.

How does mortgage overpayment work?

When you take out a mortgage, you agree to a minimum monthly repayment amount. Overpaying simply means paying more than the agreed amount, either regularly or as a lump sum. While one-off overpayments may have a smaller impact, they can still make a difference.

Rules regarding overpayments vary between mortgage products and lenders. If you decide that mortgage overpayments are right for you, inform your lender and express your intention to reduce your mortgage term through overpayments. You can adjust your mortgage payment online or set up a separate standing order to make the overpayment.

Mortgage overpayment calculators

Before making overpayments on your mortgage, it's recommended to use an online calculator to determine how much you could save. These calculators provide insights into interest savings and the expected time it will take to pay off the remaining debt.

Here are some of the top free online calculators:

MoneySavingExpert offers a free online calculator that helps you assess the potential savings from overpaying your mortgage. You'll need to enter the current mortgage debt, mortgage term, and interest rate you pay. The calculator will show you the amount of interest you can save and how many years you can shave off the repayment term.


Similar to MoneySavingExpert's calculator, Which?'s mortgage overpayment tool is free to use. By entering the current mortgage debt, mortgage term, and interest rate, you can discover potential savings and compare the time it takes to pay off the loan.


Many major mortgage lenders offer free mortgage overpayment calculators on their websites. Institutions such as Nationwide, Halifax, NatWest, Santander, Lloyds Bank, and HSBC provide accessible tools that estimate potential savings and reduced repayment terms.