Mortgage Overpayment
Calculator 2025

Most fixed rate mortgages allow overpayments of up to 10% of the outstanding balance per year without early repayment charges. Variable rate and tracker mortgages typically have no overpayment limits. Always check your mortgage offer documents before making overpayments.

Overpaying saves you interest at your mortgage rate, which effectively acts as a guaranteed return equal to that rate. If easy access savings accounts pay more than your mortgage rate, it may be better to save. But overpaying reduces financial risk and gives peace of mind that savings rates cannot.

This is one of personal finance's most debated questions. Historically long-term stock market returns have exceeded mortgage rates, but with more risk and volatility. Overpaying offers a certain, risk-free return. Most financial advisers suggest doing both — overpaying to a comfortable level and investing the rest.

A lump sum paid today saves more total interest because it reduces your balance immediately and interest accrues on a smaller amount from day one. Monthly overpayments save less in total but may be more manageable. The best strategy depends on what you can afford.

This depends on your lender's policy. Most reduce your term while keeping monthly payments the same — which saves you the most interest. Some allow you to reduce your monthly payment instead. Reducing the term is generally the better option for total interest saved.