Overpay your mortgage or save? UK calculator
See whether overpaying your mortgage or saving the same money leaves you better off by the end of your mortgage term.
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How this calculator works
It compares two ways of using the same spare cash each month. In the first, you overpay the mortgage, clear it early, then save the whole former mortgage payment until the original end date. In the second, you pay the mortgage as normal and save your spare cash every month. Both end at the same date, so the final savings pot shows which route leaves you with more.
Overpaying vs saving: what matters
- The gap between rates. If your mortgage rate is higher than your after-tax savings rate, overpaying usually wins. If savings pay more, saving usually wins.
- Certainty. Overpaying gives a guaranteed return equal to your mortgage rate. Savings rates can change.
- Access to your money. Savings can be withdrawn. Overpayments generally cannot, unless you have a flexible mortgage.
- Tax. Interest above your Personal Savings Allowance is taxed, which lowers the real return on savings. ISAs avoid this.
Frequently asked questions
Are there limits on mortgage overpayments?
Many fixed-rate deals let you overpay up to 10% of the balance per year without a fee. Going over can trigger an early repayment charge, so check your mortgage terms or ask your lender.
Should I build an emergency fund first?
Many people prefer to hold some easy-access savings before overpaying, because overpaid money is hard to get back.
Does this include mortgage rate changes?
No. It assumes both rates stay the same. If your fixed deal ends soon, run the calculator again with your expected new rate.
Is this financial advice?
No. It's an illustration based on the numbers you enter. For personal advice, speak to a regulated mortgage adviser or financial adviser.
Results are estimates for illustration only and aren't financial advice. Calculations assume constant rates, monthly payments and no fees.