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Mortgage Overpayment Calculator
See what a little extra each month does to your home loan. Enter your balance, rate, remaining term and a monthly overpayment, then press Calculate to find the interest saved and the years shaved off.
Written by TopicDrill Editorial Team·Updated June 2026
Balance: overpaying vs not
With overpayment No overpayment
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How the mortgage overpayment calculator works
The tool runs your mortgage twice. First it works out the scheduled monthly payment that would clear the balance over your remaining term. Then it adds your chosen overpayment to every payment and amortises the loan again, month by month, until the balance hits zero.
Because the extra money reduces the principal immediately, less interest accrues the following month, which leaves even more of the next payment to attack the balance. The chart plots both balance curves so you can see the overpaying line dive toward zero well ahead of the standard schedule.
A worked example
Take a 250,000 dollar balance at 6 percent with 25 years left. The scheduled payment is about 1,611 dollars a month. Add a 200 dollar overpayment and the loan clears roughly three and a half years early, saving well over 35,000 dollars in interest for an extra 200 dollars a month you were already capable of paying.
Things to keep in mind
Confirm your lender accepts overpayments and how they are applied. Some reduce the term while others lower the monthly payment instead, and only the former matches this model. For impartial guidance on overpaying, see the Consumer Financial Protection Bureau. If you would rather model a single accelerated payoff date, try our mortgage payoff calculator.
Frequently asked questions
How does overpaying a mortgage save money?
Interest is charged on the balance you still owe. When you overpay, the extra cash goes straight onto the principal, so the balance falls faster and there is less left for interest to build on each month. Over the life of the loan that compounding effect can save tens of thousands.
Is it better to overpay every month or in one lump sum?
Both help, and the earlier the money lands the more it saves. A lump sum early on removes principal sooner, while a steady monthly overpayment is easier to budget and still chips away at the balance every cycle. This tool models a fixed monthly overpayment, but the same logic favours acting sooner.
Will my lender let me overpay without a penalty?
Many lenders allow overpayments up to a yearly limit, often around 10 percent of the balance, with no charge. Beyond that an early repayment charge can apply, especially during a fixed-rate deal. Always check your mortgage terms before committing to large overpayments.
Should I overpay or invest the money instead?
It depends on your mortgage rate versus the return you could earn elsewhere. Overpaying gives a guaranteed, tax-free return equal to your mortgage rate. If investments are likely to beat that rate after tax and risk, investing may win, but overpaying is the safer, simpler choice for many homeowners.
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