What does overpaying really save?
Putting a bit extra towards the mortgage each month — or a lump sum from a bonus — can knock years off the term and save a surprising amount of interest. See exactly how much, and when you'd be mortgage-free. Free, no sign-up.
A guide, not financial advice. It assumes the interest rate stays the same for the rest of the term and that every overpayment reduces the balance straight away (most lenders calculate interest daily, so this is close). It doesn't account for early repayment charges — check your deal (see below). Before overpaying, make sure you've a rainy-day fund and no higher-interest debt. Nothing you type here leaves your browser.
Why a small overpayment goes a long way.
You pay interest on what's left, not what you borrowed. Every extra pound you put in comes straight off the balance, so you never pay interest on it again — for the whole rest of the term. That's why even a modest monthly overpayment compounds into a large saving, and why overpaying early in a mortgage saves far more than the same amount near the end.
Watch the early repayment charge. Most fixed-rate and tracker deals let you overpay up to 10% of the balance each year with no penalty. Go over that while you're still tied in and you'll usually pay an early repayment charge (ERC) — often 1–5% of the amount. Once you're on the lender's standard variable rate, you can normally overpay freely. Check your mortgage offer or ask your lender before making a big overpayment.
Reduce the term or the payment? When you overpay, ask your lender to shorten the term rather than lower your monthly payment — that's what banks the full interest saving. This calculator assumes the term shortens (you keep paying the same amount and finish earlier).
Overpay, or save instead? If a savings account or ISA pays more after tax than your mortgage rate, saving can leave you better off — and keeps the money accessible. If your mortgage rate is higher, overpaying usually wins. Our overpay or save? calculator weighs the two up.
Know exactly where your home stands.
Stead keeps your mortgage, bills, certificates and maintenance in one place — and tracks your home's running costs and value over time, so big decisions like overpaying are easy to weigh up.