An extra £100 a month. How much does it actually save?
Small overpayments compound dramatically over a 25-year mortgage. See exactly how many months you cut off and how much interest you save — instantly.
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How it works
How overpayments work
A standard repayment mortgage calculates interest on the outstanding balance each month. Overpayments reduce the balance faster, so each subsequent month's interest charge is smaller — the savings compound over time.
Early Repayment Charges (ERCs)
Most fixed-rate mortgages allow overpayments of up to 10% of the outstanding balance per year without an ERC. Check your specific terms — if you overpay more, the lender may charge a percentage of the excess (typically 1–5%).
Overpay vs invest
Overpaying your mortgage earns a guaranteed return equal to your mortgage rate (e.g. 5%). A Stocks & Shares ISA might return 6–8% long-term but with more risk. If your mortgage rate is high, overpaying is often the better guaranteed option.
Term vs payment reduction
Some lenders reduce your remaining term (keeping the same monthly payment). Others keep the term the same and reduce your monthly payment. The total interest saving is identical — but reducing the term is usually better for building equity faster.