Mortgage Overpayment Calculator
Test a lump sum and monthly overpayments, compare them fairly with investing the same cash, see whether keeping the payment or term changes the result, and stress-test the balance when your current deal ends.
Published by GrowThenDraw Editorial Team · Editorial policy · Methodology & sources
Both paths start with the same £10,000 and use £1,690/month for 25 years. After the overpaid mortgage ends, that whole monthly budget is invested for the time left.
Investment scenario: 6.00% gross − 0.25% fee − 0.00% tax drag.
One-off lump sum: shorten the term or lower the payment?
This compares the two common amortisation treatments after applying £10,000 now. Your lender decides what is actually available.
At the end of your current deal
If the rate were 6.00% after 5 years, the entered overpayments would reduce the balance by £32,662. This is a stress illustration, not a rate forecast.
| Point | Mortgage without overpaying | Mortgage after overpaying | Invest instead fund | Overpay then invest fund |
|---|---|---|---|---|
| Now | £250,000 | £240,000 | £10,000 | £0 |
| Year 1 | £244,462 | £230,327 | £14,269 | £0 |
| Year 2 | £238,669 | £220,210 | £18,783 | £0 |
| Year 3 | £232,610 | £209,628 | £23,557 | £0 |
| Year 4 | £226,273 | £198,560 | £28,606 | £0 |
| Year 5 | £219,645 | £186,983 | £33,944 | £0 |
| Year 6 | £212,712 | £174,875 | £39,590 | £0 |
| Year 7 | £205,461 | £162,210 | £45,561 | £0 |
| Year 8 | £197,876 | £148,963 | £51,874 | £0 |
| Year 9 | £189,943 | £135,108 | £58,551 | £0 |
| Year 10 | £181,646 | £120,617 | £65,611 | £0 |
| Year 11 | £172,968 | £105,460 | £73,078 | £0 |
| Year 12 | £163,891 | £89,606 | £80,974 | £0 |
| Year 13 | £154,397 | £73,024 | £89,324 | £0 |
| Year 14 | £144,466 | £55,680 | £98,154 | £0 |
| Year 15 | £134,080 | £37,540 | £107,492 | £0 |
| Year 16 | £123,216 | £18,566 | £117,366 | £0 |
| Year 17 | £111,853 | £0 | £127,809 | £1,280 |
| Year 18 | £99,969 | £0 | £138,852 | £22,157 |
| Year 19 | £87,538 | £0 | £150,530 | £44,235 |
| Year 20 | £74,536 | £0 | £162,879 | £67,582 |
| Year 21 | £60,937 | £0 | £175,938 | £92,272 |
| Year 22 | £46,713 | £0 | £189,749 | £118,382 |
| Year 23 | £31,836 | £0 | £204,353 | £145,993 |
| Year 24 | £16,276 | £0 | £219,798 | £175,191 |
| Year 25 | £0 | £0 | £236,130 | £206,069 |
What this UK mortgage overpayment calculator compares
The first result compares two uses of exactly the same spare cash. The invest path invests the entered lump sum now and the monthly spare amount thereafter. The overpay path applies that lump sum and monthly amount to the mortgage, then invests the whole released monthly budget after the mortgage is cleared.
This makes the end-of-term comparison fairer than simply comparing interest saved with an investment balance. It also shows the scheduled payment, mortgage interest saved, earlier payoff and the gross investment return needed to break even under the assumptions entered.
Reduce the mortgage term or lower the payment?
A lender may let an overpayment shorten the term while the scheduled payment stays broadly unchanged, or recalculate a lower payment while the original term stays unchanged. The separate lump-sum panel illustrates both treatments using the same balance, rate and term.
Keeping the original payment generally repays principal faster and saves more interest. Lowering the payment improves monthly cash flow but normally saves less interest. Actual lender processing, daily interest, minimum overpayment rules and rounding can produce different figures, so confirm the available treatment with your lender.
Stress-test the end of your current mortgage deal
The main comparison holds the entered mortgage rate constant so that the two strategies can be compared cleanly. The separate deal-end panel answers a different question: what balance and payment might you face if the mortgage were repriced at the stress rate you enter?
The future rate is not a prediction or a remortgage quote. The actual rate, fees, affordability checks and remaining term will depend on the market and your circumstances when the deal ends. FCA guidance explains that borrowers can move to a lender's reversion rate after a fixed deal and that early repayment charges depend on the product.
Early repayment charges and overpayment limits
Your mortgage offer determines whether an early repayment charge applies and how any penalty-free allowance is measured. MoneyHelper says many lenders allow up to 10% a year without penalties, but this is not universal and lenders can use different balances, dates and definitions.
Enter your lender's allowance and any charge quoted for the payment you are considering. The first-year warning includes the lump sum plus twelve planned monthly overpayments, but remains indicative rather than a lender decision.
Investment risk, ISA limits and liquidity
Reducing a mortgage balance avoids interest at the entered rate while that rate applies. Investment returns are uncertain: markets can rise or fall, fees reduce returns and tax can apply outside a tax-free wrapper. Test a cautious return as well as a central estimate.
Returns inside an ISA are free of UK Income Tax and Capital Gains Tax, subject to eligibility and subscription rules. The calculator checks the entered first-year lump sum and monthly contributions against the £20,000 2026/27 ISA limit before any other subscriptions. Overpaid mortgage money is usually harder to access, so consider emergency cash, expensive debt and workplace pension benefits first.
Important model limits
The calculator models mortgage interest monthly and uses constant rates within each illustration. A lender may calculate interest daily, change the payment or term differently, or impose timing and minimum-payment rules. The investment path uses a smooth constant return and cannot represent market volatility or sequence risk.
It does not model remortgage fees, product transfer pricing, loan-to-value bands, inflation, pension tax relief, investment dealing costs, loss of ISA allowance or personalised tax. Re-run the comparison when your deal, savings, charges or priorities change.
For the full decision framework, read should I overpay my mortgage or invest? You can also calculate an emergency-fund target before committing spare cash.
Frequently asked questions
Is it better to overpay my mortgage or invest?
It depends on the mortgage rate and charges, the investment return after fees and tax, your time horizon, risk tolerance and need for accessible money. Overpayment savings are more predictable; an investment outcome is not guaranteed.
Can I compare a lump sum as well as monthly overpayments?
Yes. The calculator gives both strategies the same lump sum at the start and the same monthly spare cash thereafter, so neither strategy receives more money.
Should an overpayment reduce my term or monthly payment?
Keeping the original payment usually clears the mortgage sooner and saves more interest. Keeping the original term can reduce the monthly payment instead. Your lender decides which options and processing rules apply, so use the panel as an illustration and confirm the outcome before paying.
How does the future-rate stress test work?
It projects the balance with and without the entered overpayments until the deal-end date, then calculates both payments at your entered stress rate over the remaining original term. The rate is your scenario, not a forecast or offer.
Do UK lenders allow 10% mortgage overpayments?
MoneyHelper says many lenders allow up to 10% a year without penalties, but your product can differ. Check the mortgage offer or ask the lender which balance and period determine the allowance and whether an early repayment charge applies.
Does the calculator include early repayment charges?
Yes. Enter a charge you expect to pay. The full-term comparison includes the future investment opportunity cost of paying that charge now. It does not decide whether a charge applies.
Does a Stocks and Shares ISA make investing better?
An ISA removes UK tax on income and capital gains inside the account, but it does not remove investment risk or fees. The ISA allowance is shared across eligible subscriptions and can change, so check the current rules and your remaining allowance.
Primary guidance: MoneyHelper on mortgage overpayments, FCA on early repayment charges, FCA on investment risk, Santander's lender-specific term/payment example, GOV.UK ISA rules and GOV.UK ISA tax treatment. Formula and limitations are documented in our methodology.
ISA limit used: £20,000 for 2026/27. Rules and guidance verified 2 August 2026.