Mortgage Overpayment Calculator

Most fixed-rate mortgages let you overpay up to 10% of your outstanding balance each year without charge. Above that, a lender may apply an early repayment charge, often 1 to 5 percent of the amount over the limit. Tracker and standard variable rate deals usually allow unlimited overpayments. Always check your own mortgage offer, as allowances and reset dates vary by lender.

It depends on your mortgage rate, your savings rate and your tax. Overpaying gives a guaranteed return equal to your mortgage rate, and it is tax-free because it is interest you avoid rather than interest you earn. Savings interest above your Personal Savings Allowance is taxed, so to beat overpaying your savings often need a noticeably higher headline rate. The verdict tool on this page works that out.

That is your choice, and it makes a big difference. Reducing the term keeps your monthly payment the same and clears the mortgage earlier, saving the most interest. Reducing the payment lowers your monthly cost but keeps the original end date, saving less. Some lenders reduce the payment by default, so tell yours which you want.

No. Overpaying your mortgage does not harm your credit score. You are paying down debt faster, which is positive, and it will not show as a missed or reduced payment. The only thing to watch is your lender's overpayment allowance, to avoid an early repayment charge.

Usually clear higher-interest debts first. Credit cards, overdrafts and personal loans typically charge more than a mortgage, so paying those down gives a bigger guaranteed saving. Once expensive debt is gone and you have an emergency fund, overpaying the mortgage becomes more attractive.

Usually not. Most overpayments reduce your balance and cannot be withdrawn, unless your mortgage specifically offers a borrow-back or offset feature. Because the money is tied up, keep an accessible emergency fund of three to six months of essential spending before overpaying.

Yes. Mortgage interest is front-loaded, so a larger share of your early payments goes on interest. Overpaying early gives the saving more time to build across the rest of the term, so the same overpayment is worth more in year one than in year ten.