United States
Mortgage overpayment calculator
Paying a little extra off your mortgage each month can save a striking amount of interest and clear the debt years early. This shows exactly how much. Enter your current balance, the interest rate, the years left to run, and the extra you could add to each payment. It compares the normal schedule against the overpaid one and reports two things people care about: the interest you would save in total, and how much sooner the mortgage would be gone. It is a good way to weigh overpaying against saving the money elsewhere.
Assumes a fixed rate and that overpayments shorten the term. Check your lender for any overpayment cap or early-repayment charge.
How it works
- Enter your outstanding balance, interest rate and the years remaining on the mortgage.
- Add the extra amount you would pay each month on top of the normal repayment.
- Because the regular payment is unchanged, the whole overpayment goes straight at the capital.
- A smaller balance accrues less interest the following month, so the loan snowballs down faster than the extra alone suggests.
- The result is the total interest saved and the number of months or years cut from the term.
each month: interest = balance x r/12; balance = balance + interest - (normal payment + extra)
Two schedules run side by side. Each month the balance accrues interest at the annual rate divided by twelve, then the payment reduces it. In the overpaid schedule the regular payment is unchanged, so the whole extra goes at the capital. A smaller balance accrues less interest next month, so the loan falls faster than the extra alone. The saving is the difference in total interest, and the term cut is the gap in months.
- r
- annual interest rate as a decimal
- normal payment
- the scheduled monthly repayment
- extra
- the additional amount paid each month
Overpayment reference points
| Typical penalty-free overpayment | up to 10% a year | of the balance, on many fixed deals |
| Where savings are largest | the early years | when the balance is highest |
| Early-repayment charge | often 1 to 5% | of the amount over the limit |
| Emergency fund first | 3 to 6 months | of outgoings kept accessible |
Worked example
A 200,000 balance at 5 percent with 25 years left, paying 200 extra a month: the mortgage clears roughly five years early and saves a substantial five-figure sum in interest. A larger overpayment shortens it further still, with the biggest gains coming from overpaying in the early, interest-heavy years.
Key facts
- Because the regular payment is unchanged, every penny of an overpayment reduces the capital you owe.
- A lower balance is charged less interest the next month, so overpayments compound their own benefit.
- Overpaying early in the term saves more than the same amount paid late, when little interest remains.
- Money paid into a mortgage is hard to draw back out, unlike money kept in accessible savings.
Tips
- Check your annual penalty-free overpayment limit before committing, as exceeding it can trigger a charge.
- Keep an accessible emergency fund first, since overpayments cannot easily be reversed if money is tight.
- Compare the mortgage rate against what savings earn after tax; overpay when the mortgage rate wins.
- Set up a regular monthly overpayment rather than waiting for a lump sum, so the capital falls sooner.
Frequently asked questions
Is overpaying always the right move?+
Usually, when your mortgage rate is higher than what you could earn safely on savings after tax. First confirm your lender permits overpayments and check whether any early-repayment charge would eat into the benefit.
Is there a cap on overpayments?+
Many fixed-rate deals allow up to 10 percent of the balance each year with no penalty. Exceed that and an early-repayment charge can apply, so it is worth reading your mortgage terms before committing.
Should I overpay or keep an emergency fund?+
Build a cash buffer first. Money overpaid into a mortgage is hard to get back quickly, so keep a few months of expenses accessible before throwing extra at the loan.
Why do early overpayments save the most?+
Interest is charged on the outstanding balance, which is largest at the start. Reducing it early removes interest that would otherwise compound across many remaining years.
Things to watch
- This is general information, not financial advice.
- Many fixed deals cap penalty-free overpayments, and an early-repayment charge can erode the benefit.
- The model assumes a fixed rate and that overpaying shortens the term; a variable rate would change the outcome.
Last updated: 2026
This is an estimate for general guidance, not financial, tax, legal or medical advice. Figures can change and individual circumstances vary. Always confirm with the official sources listed before making decisions.
- This is general information, not financial advice.
- Assumes a fixed rate and that overpayments shorten the term rather than the monthly payment.
- Variable rates and early-repayment charges are not modelled.
Reviewed by Vikas Dulgunde.