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Mortgage Calculator with Overpayments
See your monthly payment, total interest cost, and how overpayments can shave years off your mortgage. Enter the house price, deposit, rate, and term — then explore what happens when you overpay.
Educational only. This calculator assumes a fixed rate and standard amortisation. Real mortgages may have early repayment charges, variable rates, and other terms. Always check your mortgage offer. Not financial advice.
How a UK mortgage works
A mortgage is a secured loan used to buy property. You borrow a percentage of the house price (the loan), and repay it over a fixed term (typically 25 years) at an interest rate set by your lender. Most UK mortgages are repayment mortgages, meaning each monthly payment includes both interest and principal. Over time, the interest portion shrinks and the principal portion grows — this is called amortisation.
An alternative is an interest-only mortgage, where you pay just the interest each month and the full loan at the end. Interest-only is riskier because you must have a separate repayment plan (e.g., an ISA or investment) and is less commonly available today.
Your mortgage inputs
£50k£2m
£0£500k
LTV: 10%
0%10%
540
£0£2,000
Monthly payment
£0
excluding overpayments
£0Total interest over term
£0Total paid over term
0Years saved via overpayments
£0Interest saved via overpayments
What this means
Use the payment figure as the start of the decision, not the end. The professional read of a mortgage quote is monthly cost, total interest, LTV band, fee structure, and how much flexibility you get for overpayments or an early remortgage.
How to read the mortgage result properly
A mortgage quote is only good if it still makes sense when you look past the headline monthly payment. The serious version of this decision is about rate, fee, flexibility, and how quickly the balance actually falls.
Professional note. Use this page to understand repayment structure and interest drag. Use the remortgage break-even calculator when the real decision is whether a new deal is worth the fees and switch costs.
Year-by-year breakdown
This table shows how your loan balance shrinks over the term. In early years, most of your payment goes to interest. Over time, more goes to principal. With overpayments, you pay down principal faster and save on interest.
| Year | Opening balance | Interest paid | Principal paid | Closing balance |
|---|
Loan balance over time
Outstanding balance
Cumulative interest paid
Why overpayments are powerful
Even small overpayments compound dramatically over 25 years. When you overpay, the extra amount goes directly to principal, reducing the balance that accrues interest next month. This creates a snowball effect — the lower your balance, the less interest you pay, and the more of each payment goes to principal.
How overpayments add up
Small regular amounts make a measurable difference. An extra £50 a month on a £300,000 repayment mortgage at 5% over 25 years saves about £13,900 of interest and clears the loan 15 months early, if the rate stays the same. £200 a month on the same mortgage saves about £46,400 and clears it four and a half years early. Whether overpaying is the best use of spare money depends on the mortgage rate, any early repayment charge and what the money could earn elsewhere; the overpay or invest guide compares the two.
Loan-to-value (LTV) and mortgage rates
Your LTV is your loan as a percentage of the house price. Lenders price their deals in LTV bands: a lower LTV (a bigger deposit) generally gives access to lower rates, while a higher LTV means higher rates and stricter affordability checks. Mortgage rates change often, so the figures to compare are the lenders' current deals. The table shows the deposit each band needs on a £300,000 home.
| LTV % | Deposit required | Deposit on a £300,000 home | Loan |
|---|---|---|---|
| 95% | 5% | £15,000 | £285,000 |
| 90% | 10% | £30,000 | £270,000 |
| 80% | 20% | £60,000 | £240,000 |
| 75% | 25% | £75,000 | £225,000 |
| 60% | 40% | £120,000 | £180,000 |
A larger deposit saves interest in two ways: you borrow less, and a lower LTV band can come with a lower rate. On a £300,000 home, an extra £30,000 of deposit takes the loan from £270,000 (90% LTV) to £240,000 (80% LTV). If the lower band also meant a rate 0.5 percentage points lower (5.0% down to 4.5%, figures for illustration only), total interest over 25 years would fall by about £43,300: about £22,600 from borrowing less and about £20,700 from the lower rate.
Fixed-rate vs tracker vs standard variable rate
| Type | How it works | Trade-off |
|---|---|---|
| Fixed rate | Rate locked for a set period (for example 5 years). Payments stay the same whatever happens to Bank Rate. | Certain payments during the fixed period. If rates fall, the rate does not follow, and leaving during the deal can mean an early repayment charge. |
| Tracker rate | Follows the Bank of England's Bank Rate plus a set margin (for example Bank Rate + 1.5%). Payments change when Bank Rate changes. | Payments fall when Bank Rate falls and rise when it rises, so there is less certainty over the monthly cost. |
| SVR (standard variable) | The lender's own standard rate, which it can change under the mortgage terms; it is not tied to Bank Rate. A mortgage can move onto it when an initial fixed or tracker deal ends, and the offer says which rate follows. | The lender decides when and by how much the rate changes, so payments can change even when Bank Rate does not. |
Warning: Early repayment charges (ERCs)
Many lenders let you overpay up to 10% of the balance each year without an early repayment charge (ERC); some allow more, and your mortgage offer sets out the limit. Above the limit, or if you repay the whole loan during a deal period, the ERC in the offer applies, and it reduces the interest the overpayment saves. The calculator above does not apply any overpayment limit or charge.
Stamp duty on your purchase
Tip: Factor in stamp duty
When you buy, you'll pay Stamp Duty Land Tax (SDLT) based on the house price, if the home is in England or Northern Ireland. First-time buyers pay no SDLT on the first £300,000 of a home costing up to £500,000 and 5% on the part above £300,000; above £500,000 the relief does not apply. A first-time buyer pays nothing on a £300,000 home. At standard rates a £500,000 home costs £15,000 in SDLT, or £10,000 for a first-time buyer. Use our stamp duty calculator to see the exact cost.
Related calculators and tools
Stamp Duty calculator — what you'll pay when you buy · Compound Interest calculator — how your savings grow with investment · ISA vs GIA — tax efficiency of your savings · Pension calculator — retirement planning
Official references and further reading
gov.uk — Stamp Duty Land Tax (SDLT)
FCA — Mortgage guidance and rules
MoneyHelper — How to find the right mortgage
Bank of England — Current base rate and decisions
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Pages are checked against the primary sources listed on each page and reviewed by the Editor; corrections are logged in the changelog. Pages are drafted with the help of AI tools (how AI is used). No affiliate revenue. No sponsored content. No paid placements.
UK Tax Drag is an independent publication by Finsolve Consulting Limited, not affiliated with or endorsed by HMRC, GOV.UK or any government body.