When you overpay a UK mortgage, the extra money goes straight onto the principal — the balance you're being charged interest on. Because UK interest is calculated monthly on that outstanding balance, a smaller balance means a smaller interest charge every month from then on. The saving compounds for the entire remaining term.
You'll be mortgage-free 6 years 9 months earlier
and save £46,940 in interest.
| Without | With overpay | |
|---|---|---|
| Term | 25 years | 18 years 3 months |
| Total interest | £156,277 | £109,338 |
| You save | £46,940 · 6y 9m |
A lower interest rate could save you thousands more on top. See if you could remortgage to a better deal.
We may receive a commission if you remortgage through a partner broker. This never affects the rate you're offered.
Your lender applies it to the principal balance, usually on the day it clears. Next month's interest is calculated on the new (lower) balance, so a slice of what would have been interest now goes to clearing principal even faster.
By default, every UK high-street lender keeps your monthly Direct Debit the same and shortens the term. You can ask them to reduce the monthly payment instead — but reducing the term saves roughly twice as much interest over the life of the loan.
During a fixed or tracker deal, you can usually overpay up to 10% of the balance per year without paying an Early Repayment Charge. Above that, ERCs of 1–5% apply. On SVR the cap normally drops.
£200,000 mortgage at 4.5% over 25 years: monthly payment £1,112. Overpay £200/month and you clear the mortgage in around 19.5 years and save roughly £30,000 in interest. The calculator below runs this for your exact mortgage.
Important: This article is for general information and is not financial advice. Always speak to a qualified UK mortgage adviser before making decisions about overpayments, remortgaging, or your specific mortgage product.