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Find out how much interest a regular overpayment (or one-off lump sum) would save you, and how many years it could knock off your UK mortgage term. Compares with vs. without overpayments side by side.
| Without overpayment | With overpayment | |
|---|---|---|
| Monthly payment | £0 | £0 |
| Months to repay | 0 | 0 |
| Total interest paid | £0 | £0 |
| Total cost of loan | £0 | £0 |
Assumes the interest rate stays fixed throughout the term and your lender accepts overpayments without ERCs. Real mortgages reprice when fixed deals end.
A standard repayment mortgage front-loads the interest. In the early years, most of your monthly payment goes to the lender as interest and only a sliver chips at the principal. Every extra pound you put in skips that meter entirely — it goes straight to reducing the balance you owe.
That smaller balance means less interest the next month, which means a slightly bigger chunk of your normal payment goes to principal, which compounds. By year three or four, a £200/month overpayment on a £200,000 mortgage at 4.75% has typically already saved you four-figure sums in future interest.
Pure maths: if your expected after-tax investment return beats your mortgage rate, investing wins. With UK mortgages around 4–5% and Stocks & Shares ISAs historically returning ~5–7% real, it's often closer than people assume — and the mortgage return is guaranteed and risk-free.
Behaviourally, overpayments also force the discipline. You can't accidentally spend an overpayment. Many people split: some to the mortgage, some to the ISA. The right answer depends on your rate, your investment timeline, and how much sleep you'd lose at a 30% market drop.
No — this models a standard repayment (capital & interest) mortgage. On an interest-only deal, overpayments work differently because they're paying down a balance you weren't otherwise reducing.
No. We assume the rate stays the same. In reality, you'll likely remortgage every 2–5 years and your rate will change. Use the tool as a "what if today's rate held" estimate, then re-run when you remortgage.
Both save interest because both shrink the balance. Reducing the term keeps your monthly payment the same and finishes the mortgage faster. Reducing the payment lowers each month but keeps the original end date. This calculator shows the "reduce the term" version, which saves more interest.