Reviewed by Mustafa Bilgic
Founder, WebCalculator
Calculations use the standard amortisation method. Confirm overpayment rules and ERCs with your lender and consider advice from an FCA-regulated adviser. Estimates only.
Find your monthly repayment, then see the magic of overpaying: how many years you’d knock off the term and how much interest you’d keep in your pocket by paying a little extra each month.
Capital & interest repayment mortgage
Interest on a repayment mortgage is charged on the outstanding balance. Every pound you overpay reduces that balance, so it cuts the interest you’re charged for the rest of the term — not just this month. That compounding effect is why even a modest, consistent overpayment can shorten a 25-year mortgage by several years.
Compare your mortgage rate with the after-tax interest you could earn on savings:
Standard monthly repayment at 4.5% over 25 years:
| Balance | Monthly | Total interest |
|---|---|---|
| £150,000 | £834 | £100,100 |
| £200,000 | £1,112 | £133,500 |
| £250,000 | £1,390 | £166,900 |
| £300,000 | £1,668 | £200,300 |
Overpaying shrinks the balance interest is charged on. On a £200,000 mortgage at 4.5% over 25 years, an extra £150 a month clears it about 5 years early and saves roughly £28,000 in interest.
If your mortgage rate beats the after-tax interest on your savings, overpaying usually wins. But keep an emergency fund, mind early repayment charges, and weigh up pension contributions for the tax relief.
Most fixed-rate UK mortgages allow overpayments of up to 10% of the balance per year penalty-free. Above that, an early repayment charge may apply — always check your lender’s terms.
By default, most lenders keep your monthly payment the same and shorten the term. Some let you choose to reduce the payment instead — this calculator models the “shorten the term” approach.