Why overpaying works so well
Mortgage interest is charged on the balance you still owe. Every extra payment goes straight off that balance, so it stops being charged interest for the rest of the term — which is why a modest monthly overpayment can save far more than it costs and bring your mortgage-free date years closer.
Interest saved vs years saved
This calculator compares two runs of your mortgage: the normal schedule, and the same mortgage with your overpayment added every month. The difference in total interest is your saving; the difference in how long the mortgage lasts is the time saved. Higher rates and earlier overpayments save the most.
Before you overpay
Two practical checks: many fixed-rate mortgages allow overpayments of up to 10% a year before an early-repayment charge applies, so confirm your limit; and it usually only makes sense to overpay once you've cleared higher-interest debt and kept an emergency fund.
Is overpaying better than saving?
If your mortgage rate is higher than the after-tax interest you'd earn on savings, overpaying usually wins financially — but savings stay accessible, while overpayments are locked into the property.
Will my monthly payment drop?
Usually the term shortens rather than the payment falling — you finish earlier. Some lenders let you choose to lower the payment instead; ask yours.
More money calculators
This calculator compares amortisation with and without a constant monthly overpayment and is for general information only — it is not financial or mortgage advice. It ignores early-repayment charges, overpayment limits and rate changes. Check your mortgage terms with your lender. WorldTax is independent.