How much time and interest could you save by overpaying your mortgage each month? Calculate the impact of any overpayment amount.
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How This Works
Overpaying reduces the outstanding balance faster, so less interest accrues each month. The saved interest compounds over time — even small overpayments have significant long-term impact. A £200/month overpayment on a £200,000 mortgage at 4.5% saves approximately £25,000 in interest and clears the mortgage 5 years early.
Compare the mortgage interest rate (guaranteed saving) vs savings account rate (variable return). If your mortgage rate is 4.5% and best savings accounts offer 4.5%+, saving might win marginally. However, overpaying has the psychological benefit of guaranteed debt reduction and tax-free "return" (you don't pay tax on mortgage interest savings). For most people in 2024/25, mortgage rates and savings rates are close — a split approach (some savings, some overpayment) is sensible. Prioritise clearing high-interest debt before mortgage overpayments.