Mortgage Overpayment Calculator
Thinking about making overpayments on your mortgage? Use our simple calculator below to see how overpaying can reduce your total interest and shorten your mortgage term.
Mortgage Term
And/OR
Please note: This calculator is for guidance only and provides an estimate based on the information you enter. For a more tailored assessment, get in touch with us for a free consultation based on your financial situation and goals.
Overpaying your mortgage can have several benefits, from reducing the total interest you pay to paying off your loan faster.
Even small overpayments can make a significant difference over time.
How Does the Mortgage Overpayment Calculator Work?
Our calculator helps you understand the potential impact of both regular monthly overpayments and one-off lump sum payments. It shows how overpayments can:
- Shorten your mortgage term
- Reduce the total interest paid over the life of the loan
- Lower your outstanding balance more quickly
What Information Do I Need?
To use the calculator effectively, you’ll need:
- Outstanding Mortgage Balance (£): The remaining amount you owe on your mortgage.
- Remaining Mortgage Term (years): The number of years left on your current mortgage deal.
- Interest Rate (%): The rate applied to your mortgage. Check your mortgage agreement or latest statement for this.
- Monthly Overpayment (£): The extra amount you plan to pay each month.
- Lump Sum Overpayment (£): Any one-off payment you intend to make.
Is Overpaying Your Mortgage Always a Good Idea?
While overpaying can save you money in interest and help you become mortgage-free sooner, it’s important to consider:
- Overpayment Limits: Some lenders cap how much you can overpay each year without incurring penalties. Check your mortgage terms for any restrictions.
- Early Repayment Charges (ERCs): Certain mortgages come with fees for paying off your loan early. Always review your agreement before making large overpayments.
- Other Financial Goals: Consider if overpaying your mortgage is the best use of your extra funds. You may want to build an emergency fund, pay off higher-interest debts, or invest elsewhere.
Are Mortgage Overpayment Calculators Accurate?
Our overpayment calculator gives you a helpful estimate, but it doesn’t account for all variables, such as changes in interest rates or additional fees. For a precise assessment, contact a mortgage adviser who can review your specific circumstances.
Important Considerations:
- Budgeting: Ensure you can comfortably afford overpayments alongside other expenses.
- Flexibility: If your mortgage doesn’t allow flexible overpayments, you might face penalties. Confirm with your lender.
- Alternative Options: If overpaying isn’t right for you, consider offset mortgages or other savings options that could reduce your interest costs.
What If Overpayments Aren’t Feasible?
If overpaying feels out of reach, don’t worry. There are other ways to manage your mortgage effectively:
- Remortgaging: You might find a better interest rate with another lender.
- Offset Mortgages: Use your savings to reduce the interest on your mortgage without committing to overpayments.
- Flexible Mortgages: Look for mortgage products that allow payment holidays or flexible overpayment options.
What our customers are saying about us
Customer service and communication are our strong points, but we don’t expect you just to take our word for it. If you have time, please take five and read what our customers are saying about us and why they rate us as a 5-star mortgage broker.
Looking for a mortgage? Get in touch with The Mortgage Pod today
Whether you’re looking to buy your first home, moving home or seeking to remortgage, The Mortgage Pod is here to help you find the best deal for your circumstances. Contact us today to arrange a consultation.
