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Mortgage Overpayment Calculator
Use our mortgage overpayment calculator to find out how much money you could save by overpaying on your mortgage and reducing the interest charged.
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We use the following assumptions in the calculations:
- Based on a repayment mortgage
- Any regular monthly overpayments remain the same over the term of the mortgage
- All years are of equal length
- Interest is calculated daily and added monthly
- The mortgage balance shown on the graph and table are the same, and are the amount left on the mortgage at the end of that particular year
- Multiple sub-accounts must be calculated individually
- Estimate of total interest saved is rounded to the nearest pound
- There is no change in interest rate which would recalculate your monthly payment
- There will not be any changes to your mortgage which would result in a recalculation of your monthly payment e.g. changes to your mortgage product, term, type or change of owners
Things to consider:
- This calculator only gives an example of what you could save
- It won’t include any early repayment charges that might apply (or other fees, if you’re with another lender).
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A mortgage overpayment is when you make a bigger repayment than was agreed in the terms of your mortgage.
You might pay off a larger amount in one lump sum, or agree to increase your monthly repayments.
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It can be tempting to overpay on your mortgage if you can. But there are things you should think about before you do.
Overpaying could mean lower monthly payments or it might help you pay off your mortgage quicker. Overpayments reduce your mortgage balance and will save you interest.
You may be charged for overpaying more than your lender allows. This is called an early repayment charge. Check with your lender before you make an overpayment.
More things to consider
Overpayments will not always lower your mortgage term. When we work out your monthly payment, we will use the reduced balance to work out the new payment over your existing term. If you want to reduce your term, you will need to check with your lender.
It might be tempting to overpay by as much as you can. But if you overpay, you won’t be able to withdraw the extra money paid at a later date. It’s a good idea to keep savings aside in case of emergencies.
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There are different kinds of mortgages, some have limits on how much you can overpay. For our mortgages, if there is a limit it is 10% each year. If you overpay more than this you might have to pay an early repayment charge.
Lump Sum Overpayment
You can choose to overpay with one lump sum. These are not linked to your monthly payments. By paying off larger amount, you may choose to lower your monthly payments or pay your mortgage off quicker.
Monthly Overpayments
You could also choose to increase your monthly repayments for a set period. You may choose to lower your monthly payments or pay your mortgage off quicker. You can overpay on your monthly amount whenever you like, so long as you do not pay more than any overpayment limit that is in place on your mortgage.