Overpayment calculator

The overpayment calculator below is a fantastic interactive resource for anyone who is considering overpaying on their mortgage. It can help you save money and show you how to pay off your mortgage faster, giving you an instant guide on how your new mortgage payments could look.

Overpaying can bring many benefits though it needs careful consideration and planning. Seek advice before going ahead as mortgage brokers will be able to analyse whether it is going to be in your interest to do so.

How our overpayment calculator works

Easy to use, you simply need to input information about your loan – whether it’s a repayment or interest only mortgage and its size. Next, enter how much you wish to overpay on the mortgage each month, your current interest rate and the loan term in years. Then click on the calculate button to see a detailed breakdown of how much quicker you will repay your full mortgage. We will also show you how much this early repayment will save you in interest payments.

If you’d like to adjust the amount you’re thinking of overpaying by, just click on the clear calculator button and start again. Knowing how much you’re likely to save and how much quicker you can pay off your mortgage can get you closer to knowing how much you might want to pay off each month. That said, remember our calculator should be used a guide only.

The benefits of overpaying your mortgage

Overpayments are currently proving popular, as many endeavour to offset the impact of the current high interest rates. Generally speaking, overpaying your mortgage is worth considering if your finances allow. Though, each case needs to be assessed individually. If your mortgage is manageable and you have savings, it might be prudent to keep things as they are. The key is that if your mortgage rate is close to or greater than your savings rate, you’re likely to be better off overpaying.

The main advantages of overpaying your mortgage are:

• Throughout your term, you would pay less in interest than if you were making the minimum monthly payments. Even saving tens of thousands of pounds, as you don’t pay interest on the amount you overpay. This is the biggest benefit and typically the reason many opt to overpay if they can.
• Reducing your overall debt means you can pay your mortgage off faster. Once it’s paid off, you will have cleared one of your largest outgoings, if not the largest outgoing, each month.
• You will achieve homeownership faster too. This can bring peace of mind and give you security.
• Investing in your home is typically prudent, as property values tend to increase. By putting capital into your home, it will become equity.
• Being in a strong position financially means you’re likely to be able to access more favourable mortgage deals in the future. Generally speaking, the better the position you’re in, the better the deals you’ll be able to get, which is good news for when it’s time for you to remortgage.  

With all this in mind, before committing to overpaying, check your mortgage product doesn’t penalise you for doing so.  

See our should you overpay your mortgage? guide for more information.

One off payments vs monthly overpayments

There are two different ways you can make overpayments. They are:

1. Single overpayments. Paying a one-off lump sum whenever you have some spare cash to hand. This way, you’re likely to save more money in interest payments and pay your loan off faster.  
2. Smaller monthly overpayments. You can factor in the additional amount within your monthly budget. You will be able to reduce or stop overpayments should you need to and simply go back to paying your regular minimum monthly repayment.

With many mortgage products, you won’t be able to access the overpaid amount once it has been attributed to paying off your mortgage. So, if you think overpaying could cause you issues down the line, it might be worth holding off until you are in a better position.

How James Leighton can help

Our qualified and highly experienced team of brokers can look at your current financial situation and your goals for the future. Providing a holistic approach, including taking your savings and interest rates into account, they can advise you on whether it could be worthwhile for you to overpay your mortgage. They will be happy to answer any questions you may have.  

Related links

See our affordability calculator for an idea of how much you might be able to borrow for a mortgage.

See our repayment calculator to establish monthly mortgage repayments.

See our remortgaging page for more information on switching your existing mortgage.

To discuss whether overpaying your mortgage is a suitable option for you, contact our specialist brokers today.