Mortgage Overpayment Savings: How Much Could You Save?

Last updated: 9 June 2026

By Stiv · Design, technology and personal finance

I've been using Sprive with my Nationwide mortgage since October 2021, making £100 monthly overpayments through the app. This post is based on over four years of real use and real numbers.

Most people know they should overpay their mortgage. Almost nobody knows by how much, or what it actually saves them. So we built a free mortgage overpayment calculator to find out. Then we ran our own numbers through it. The mortgage overpayment savings took us by surprise. We've since added a compare-to-savings toggle so you can see whether overpaying or saving the same money comes out ahead at your specific rates.

This article is for informational purposes only and does not constitute financial or mortgage advice. Mortgage products, rates, and overpayment terms vary by lender. Always check your lender's overpayment policy before making extra payments. This article contains affiliate or referral links. If you click through and sign up I may earn a commission or referral bonus at no extra cost to you. It does not affect my editorial view. Your home may be repossessed if you do not keep up repayments on your mortgage. CoolCuration is not authorised by the Financial Conduct Authority.

See your own overpayment savings

Our free calculator shows what your overpayments could save, and whether saving the cash instead would beat them.

Open the overpayment calculator

A quick word on how our three mortgage guides fit together. This is the numbers one: what overpaying could actually save you, with worked examples and the calculator. For the step-by-step strategy, see how to pay off your mortgage faster. And to cut the cost of the mortgage itself, start with save thousands on your mortgage.

Try our free mortgage overpayment calculator

Our calculator does the heavy lifting for you. Enter your outstanding balance, your interest rate, your remaining term and your planned overpayment. It tells you, in seconds, how many years come off your term and how much interest you avoid paying. So before you read another line, run your own numbers.

Use our free calculator

New: compare overpaying to saving the same money

We've added a new toggle to the calculator. Tick the "compare to savings" box, enter your savings rate, and the result page shows two columns side by side. The first shows how much interest you would save by overpaying. The second shows how much interest you would earn by putting the same monthly amount into a savings account over the same period. The winning column is highlighted, and the verdict line tells you the cash gap between them.

The maths is fair on both sides. The same monthly commitment runs over the same number of years. Therefore the only variable is where the money goes. With the Bank of England base rate at 3.75%, top easy-access savings around 4.75%, and the Zopa Regular Saver paying 7.10% AER capped at £300 a month, the gap between overpaying and saving is closer than it has been in years. The calculator tells you which wins for your specific scenario, in pounds.

Note that the savings interest is shown gross. If your savings interest crosses the Personal Savings Allowance (£1,000 for basic rate, £500 for higher rate) you may owe tax, which would tilt the result back toward overpaying. The calculator's assumptions panel spells this out.

Try the compare-to-savings feature

What we found when we ran our own numbers

We're a couple with a £200,000 repayment mortgage at roughly 4.5%, over a 25 year term. Like most UK borrowers, we fix every few years and remortgage when the deal ends. In October 2021, we set up a £100 monthly overpayment via Sprive and largely forgot about it.

So when we plugged that scenario into the mortgage overpayment calculator, here's what came back. Overpaying just £100 a month knocks roughly three and a half years off the term. It also saves over £21,000 in interest over the life of the loan. That's not a typo. Twenty-one thousand pounds.

The thing that surprised us most wasn't the headline saving. It was how quickly the effect compounds. After year one, the difference is barely noticeable. By year five, you're months ahead. By year ten, you're years ahead. Seeing those mortgage overpayment savings on screen makes the abstract feel very concrete.

Three mortgage overpayment savings examples

Here's how mortgage overpayment savings stack up across different budgets and balances. We've run each through our calculator using fixed rate assumptions for the full term. Real life will differ as you remortgage, but the direction of travel is consistent.

Example 1: the £50 a month saver

Mortgage: £150,000. Rate: 4.5%. Term: 20 years. Overpayment: £50 a month.

Time saved: roughly 1 year and 6 months
Interest saved: around £6,800

That's the cost of a couple of takeaway coffees a week. Most people can find £50 without dramatically changing their lifestyle, and the long-term mortgage overpayment savings are still significant.

Example 2: the £100 a month steady overpayer

Mortgage: £200,000. Rate: 4.5%. Term: 25 years. Overpayment: £100 a month.

Time saved: roughly 3 years and 6 months
Interest saved: around £21,000

This is exactly what we do. £100 a month, automated through Sprive, completely forgotten about. The compound effect over 25 years is staggering.

Example 3: the aggressive overpayer

Mortgage: £300,000. Rate: 5%. Term: 30 years. Overpayment: £200 a month.

Time saved: roughly 6 years and 5 months
Interest saved: around £69,000

If you can afford it, £200 a month on a larger mortgage at a higher rate creates dramatic savings. Almost £70,000 in avoided interest is serious money. It's also money the lender simply doesn't get.

Why the maths is so powerful

Compound interest is brutal when it works against you. Your lender charges interest each month on the outstanding balance. Therefore every overpayment reduces that balance permanently. As a result, less interest gets charged the next month, and more of your regular payment goes towards the principal. Then the same thing happens again. And again.

It's a snowball effect. The first year barely moves the needle. By year five, the gap between overpaying and not overpaying is visible. By year ten, the gap is enormous. Crucially, mortgage overpayment savings don't get taxed. Unlike savings interest, you keep every penny you save.

Before you overpay: check your lender's rules

Before trusting any mortgage overpayment calculator, check your specific terms. Most UK lenders allow you to overpay up to 10% of your outstanding balance each year. There's no early repayment charge within that cap. However, some lenders are stricter. A few are slightly more generous.

If you're on a tracker or standard variable rate, there's usually no overpayment cap. Fixed-rate deals almost always have the 10% cap baked in. Therefore go beyond it and you may face an early repayment charge of 1% to 5%. That penalty can wipe out your savings.

For a quick reference, we've collected the rules for major UK lenders in our Sprive overpayment rules guide. The independent MoneyHelper guide on mortgage overpayments covers the basics in plain English. MoneySavingExpert also walks through the strategy in more detail.

For wider context, our how mortgage overpayments work explainer covers the basics if you're new to this.

Term reduction or payment reduction?

When you overpay, your lender will usually ask you to choose. Either reduce the term, or reduce the monthly payment. So which one wins?

Reducing the term typically produces larger total savings; which approach suits you depends on your circumstances. Reducing the monthly payment lowers your immediate outgoings but barely shortens the loan. Reducing the term keeps your payment the same and shaves real years off the back end. As a result, you save dramatically more in interest.

How to automate your overpayments

Running the calculator is step one. Step two is doing it consistently, every month, for years. That's where most people fall down. You mean to overpay, life gets in the way, and six months later you've overpaid once.

Sprive automates the whole thing. Connect your mortgage, set your overpayment amount, and the app handles the rest. There are no fees. There's also a cashback feature that earns you money on everyday shopping. That money then goes straight off your mortgage.

Try Sprive

Sprive Limited (FRN 919863) is an appointed representative of Connect IFA Ltd (FRN 441505), which is authorised and regulated by the Financial Conduct Authority; verify on the FCA register. Money in the Sprive wallet is held by PrePay Technologies Ltd (FRN 900010) as safeguarded e-money, not FSCS-protected.

For our full hands-on opinion, read our Sprive mortgage app review. We've also written about how Sprive compares to Chip and Plum, and explained how Sprive's cashback goes straight off your mortgage.

Overpay or invest? The perennial question

Should you overpay your mortgage, or invest the money instead? There's no single right answer. The predictable return on overpaying (avoiding 4-5% interest) is hard to beat with the uncertainty of investing. However, it depends on your rate, your time horizon, your risk tolerance, and how close you are to retirement.

Overpaying may produce a stronger return for many borrowers, depending on rates and tax position. We've written a full comparison in overpay mortgage or invest for the head-to-head. As always, build a three to six month emergency fund first. Money sent to your lender is locked away.

Capital at risk. The value of investments can go down as well as up and you may get back less than you invested. Past performance is not a reliable indicator of future results. Tax treatment depends on the individual circumstances of each client and may be subject to change in future.

Run your own numbers

The mortgage overpayment savings on your specific mortgage will be different from ours. So don't take our word for it. Plug in your real balance, your real rate, and your real term. While you're at it, tick the compare-to-savings box to see whether overpaying or saving comes out ahead at your rates. The result will either confirm what you suspected, or it will completely surprise you. Either way, you'll know exactly what's possible.

Run your numbers now

This article is for informational purposes only and does not constitute financial or mortgage advice. Mortgage products, rates, and overpayment terms change frequently. Always verify current terms with your lender. Figures shown are estimates based on a fixed rate held for the full term, which is not how real mortgages work in practice. Your home may be repossessed if you do not keep up repayments on your mortgage. CoolCuration is not authorised by the Financial Conduct Authority.

Frequently asked questions

How much does overpaying your mortgage save?

It depends on your balance, rate, and overpayment. Take a £200,000 mortgage at 4.5% over 25 years. Adding £100 a month in overpayments saves about £21,000 in interest. It also clears the loan around three and a half years early. Run your own numbers in the calculator above for a personalised answer.

How much should I overpay my mortgage UK?

Most lenders cap penalty-free overpayments at 10% of your outstanding balance each year. Within that cap, overpay as much as you can sustain without dipping into your emergency fund. Even £50 a month makes a noticeable difference over 20-plus years.

Can I overpay my mortgage by £100 a month?

Yes, almost certainly. £100 a month sits well within the 10% annual overpayment allowance for any mortgage above about £12,000 in balance. Therefore the cap is unlikely to be a problem at this level. Always confirm with your lender, however.

What is the 10% overpayment rule?

Most UK fixed-rate mortgages let you overpay up to 10% of your outstanding balance each year. That overpayment carries no early repayment charge. Some lenders measure this against the balance at the start of the year, while others use a rolling figure. Always check your specific terms.

Is it better to overpay mortgage or save?

It depends on your specific rates. Generally, if your mortgage rate is higher than the after-tax interest you can earn on savings, overpaying wins. With most UK mortgage rates at 4-6% and easy-access savings paying less after tax, overpaying typically beats saving. The calculator above now compares both directly. Tick the "compare to savings" box, enter your savings rate, and you'll see which wins in pounds for your specific scenario. Build an emergency fund first regardless.

Where do I find the compare-to-savings option in the calculator?

It's on the calculator page below the standard inputs. Tick the "compare to savings" box, a savings rate field appears, enter your rate and hit Calculate. The comparison shows up alongside your overpayment results, with a clear verdict on which option wins.

Does overpaying reduce the term or the payment?

Most lenders let you choose, but the default tends to be term reduction. For maximum interest savings, always reduce the term. Reducing the monthly payment makes the saving feel immediate but barely shortens the loan.

Can my lender charge me for overpaying?

Yes, if you go above your allowance. Most fixed-rate deals charge an early repayment charge of 1% to 5%. That penalty applies on any amount above the 10% annual cap. So staying within the limit is essential to keep your mortgage overpayment savings intact.

What is the best mortgage overpayment app?

We use Sprive and have done since October 2021. It's the only UK app dedicated specifically to mortgage overpayments, and the cashback feature is a useful bonus. Read our full Sprive review for our honest opinion.

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