Mortgage Overpayment Calculator
See how much time and interest a monthly overpayment could save, then compare it fairly with investing the same spare cash. Includes fees, tax drag, early repayment charges and a lender-allowance check.
Published by GrowThenDraw Editorial Team · Editorial policy · Methodology & sources
Both paths 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.
| Point | Mortgage without overpaying | Mortgage after overpaying | Invest instead fund | Overpay then invest fund |
|---|---|---|---|---|
| Now | £250,000 | £250,000 | £0 | £0 |
| Year 1 | £244,462 | £240,787 | £3,694 | £0 |
| Year 2 | £238,669 | £231,150 | £7,600 | £0 |
| Year 3 | £232,610 | £221,070 | £11,731 | £0 |
| Year 4 | £226,273 | £210,528 | £16,100 | £0 |
| Year 5 | £219,645 | £199,501 | £20,719 | £0 |
| Year 6 | £212,712 | £187,968 | £25,605 | £0 |
| Year 7 | £205,461 | £175,905 | £30,771 | £0 |
| Year 8 | £197,876 | £163,287 | £36,234 | £0 |
| Year 9 | £189,943 | £150,090 | £42,011 | £0 |
| Year 10 | £181,646 | £136,287 | £48,121 | £0 |
| Year 11 | £172,968 | £121,849 | £54,582 | £0 |
| Year 12 | £163,891 | £106,749 | £61,414 | £0 |
| Year 13 | £154,397 | £90,954 | £68,639 | £0 |
| Year 14 | £144,466 | £74,434 | £76,280 | £0 |
| Year 15 | £134,080 | £57,155 | £84,360 | £0 |
| Year 16 | £123,216 | £39,083 | £92,905 | £0 |
| Year 17 | £111,853 | £20,180 | £101,941 | £0 |
| Year 18 | £99,969 | £408 | £111,496 | £0 |
| 18y 1m | £98,954 | £0 | £112,317 | £1,280 |
| Year 19 | £87,538 | £0 | £121,601 | £20,373 |
| Year 20 | £74,536 | £0 | £132,287 | £42,348 |
| Year 21 | £60,937 | £0 | £143,587 | £65,587 |
| Year 22 | £46,713 | £0 | £155,538 | £90,162 |
| Year 23 | £31,836 | £0 | £168,175 | £116,150 |
| Year 24 | £16,276 | £0 | £181,539 | £143,633 |
| Year 25 | £0 | £0 | £195,671 | £172,695 |
What this UK mortgage overpayment calculator compares
The first result is the standard overpayment calculation: your scheduled repayment, interest saved and how much sooner the mortgage could end. The second result answers the harder question—what if the same spare monthly cash were invested instead?
Both strategies use the same recurring cash budget over your mortgage's original remaining term. The invest strategy pays the scheduled mortgage and invests the spare amount. The overpay strategy pays both amounts into the mortgage, then invests the whole released monthly budget after the mortgage is cleared.
Why the investment return is not a promise
Reducing a mortgage balance avoids interest at the entered mortgage rate while that rate applies. An investment return is uncertain: markets can rise or fall, fees reduce returns, and tax can apply outside a tax-free wrapper. That makes the calculator a scenario comparison, not a recommendation.
Test a cautious return as well as your central estimate. The break-even result shows the gross annual return the investment would need under this model after the fee and tax-drag assumptions you entered.
Early repayment charges and overpayment limits
Your mortgage offer determines whether an early repayment charge applies and how any penalty-free allowance is measured. The FCA says charges can apply when a mortgage is repaid during a fixed or discounted deal and that terms depend on the product.
MoneyHelper says many lenders allow up to 10% a year without penalties, but that is not a universal rule. Enter your own lender's allowance and any expected charge. The warning is indicative because lenders can use different balances, dates and overpayment definitions.
ISA, taxable account and liquidity
Returns inside an ISA are free of UK Income Tax and Capital Gains Tax, subject to eligibility and the annual subscription rules. The calculator uses zero tax drag for the ISA option and lets you enter an estimated annual drag for a taxable or other account.
Overpaid mortgage money is usually harder to access than cash or investments. Before either strategy, consider an accessible emergency fund, expensive short-term debt and valuable workplace pension contributions. Check whether an offset or flexible mortgage changes the liquidity trade-off.
Important model limits
The projection holds the entered mortgage rate and investment return constant for the remaining term. It models mortgage interest monthly, although a lender may calculate interest daily and may change your payment or term differently after an overpayment.
It does not model remortgaging, changing rates, investment volatility, sequence risk, fund dealing costs, inflation, pension tax relief, loss of ISA allowance, loan-to-value pricing or personal tax calculations. Re-run the comparison when your mortgage deal changes.
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 while an investment outcome is not guaranteed.
How much interest will a mortgage overpayment save?
Enter your current balance, rate, remaining term and monthly overpayment. The calculator compares the interest on the original repayment schedule with the interest after overpaying and shows the difference.
How does the overpay-versus-invest comparison stay fair?
Both strategies use the same recurring monthly budget for the original mortgage term. Once the overpay strategy clears the mortgage, it invests the former scheduled payment plus the spare amount for every remaining month.
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 your mortgage offer or ask the lender how the allowance is calculated and whether an early repayment charge applies.
Does the calculator include early repayment charges?
Yes. Enter a charge you expect to pay. For the end-of-term comparison, the tool includes the future investment opportunity cost of paying that charge now. It does not decide whether your lender will charge it.
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 ISA 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, 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 verified 29 July 2026.