Calculate Your Overpayment Savings
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Your Overpayment Impact
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Why Overpaying Your Mortgage Makes Sense
Overpaying your mortgage — even by a small amount each month — can save you thousands of pounds in interest and shave years off your mortgage term. Every extra pound you pay reduces the outstanding balance, which reduces the interest charged each month.
Most UK lenders allow overpayments of up to 10% of the outstanding balance per year without penalty. Always check your mortgage terms before overpaying, especially during a fixed-rate period. If your savings earn less interest than your mortgage rate, overpaying is often the better financial move.
Frequently Asked Questions
How much can I overpay my mortgage? ▼
Most lenders allow overpayments of up to 10% of the outstanding mortgage balance per year without an early repayment charge. Check your specific mortgage terms as this varies.
Is it better to overpay or save? ▼
If your mortgage interest rate is higher than the interest you earn on savings, overpaying gives a guaranteed return. With current mortgage rates typically higher than easy-access savings rates, overpaying is often the better choice for most people.
What is an early repayment charge? ▼
An early repayment charge (ERC) is a penalty for overpaying more than your lender allows, typically during a fixed-rate deal. ERCs are usually 1–5% of the amount overpaid above the allowance.
All figures are estimates. Always consult a financial adviser and check your mortgage terms before overpaying.