How much could overpaying my mortgage save?

On a £240,000 repayment mortgage over 25 years at 4.5%, overpaying £100 a month saves about £21,746 in interest and clears it 3 years early. £200 a month saves about £38,076 (5 years 3 months early), and £500 a month about £69,569 (9 years 11 months early).

Many UK lenders let you overpay up to 10% of the outstanding balance each year during a fixed or tracker deal. Paying more than your allowance can trigger an early repayment charge, often 1 to 5% of the excess. Once your deal ends and you move to the standard variable rate, you can usually overpay as much as you like. Check your mortgage terms.

Overpaying gives you a guaranteed return equal to your mortgage rate. Saving or investing makes more sense if you can earn more than that after tax, or if you don't yet have an emergency fund. Money used to overpay usually can't be taken back out.

When you overpay, lenders usually either keep your payment the same and shorten the term, or recalculate a lower monthly payment over the same term. Shortening the term saves more interest. This calculator shows the shorter-term option.

Paying a lump sum earlier saves more interest than spreading the same amount over the year, because the balance falls sooner. This calculator models regular monthly overpayments.