Mortgage Overpayment Calculator
See how much time and interest you could save by paying a little extra.
Loan Details
Overpayment
Total Interest Saved
$0
Time Off Mortgage
0 Years
Balance Projection
Comparison
| Scenario | Payoff Date | Total Interest |
|---|---|---|
| Standard | - | - |
| With Overpayment | - | - |
Understanding Mortgage Overpayments
Making an overpayment on your mortgage means paying more than the required monthly amount. This extra money goes directly towards reducing your loan principal, which decreases the amount of interest you pay over the life of the loan and can significantly shorten your mortgage term.
Benefits of Overpaying
- Be Mortgage Free Sooner: Even small extra payments can knock years off your loan.
- Save Thousands in Interest: Because interest is calculated on your balance, reducing the balance faster saves you money.
- Build Equity Faster: You own more of your home sooner.
Things to Consider
- Early Repayment Charges (ERCs): Some lenders charge a fee if you overpay more than a certain amount (often 10% of the balance) per year.
- Other Debts: It might be better to pay off higher-interest debts (like credit cards) before overpaying your mortgage.
- Emergency Fund: Ensure you have savings accessible for emergencies before locking cash into your home equity.
Frequently Asked Questions
Can I overpay my mortgage?
Most mortgages allow overpayments, but limits often apply. Check with your lender to see if you have an Early Repayment Charge limit, usually around 10% of the outstanding balance per year.
Does overpaying reduce monthly payments or the term?
Usually, overpayments reduce your term (making you mortgage-free sooner). However, you can often ask your lender to reduce your monthly payments instead while keeping the term the same.
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