Mortgage Payoff Calculator
Amortisation FormulaSee how extra monthly payments can cut years and thousands off your mortgage.
Choose whether you know your remaining term, or enter your current statement balance directly.
Paying an extra £200.00 a month clears the mortgage 3y 9m sooner and saves £26,898.18 in interest.
Breakdown
- Time saved
- 3y 9m
- Interest without overpaying
- £129,303.55
- Interest when overpaying
- £102,405.37
- New term
- 16y 3m
Show your working
Balance over time
The gap between the two lines is the interest the overpayment avoids.
Assumptions
- The interest rate stays fixed for the whole remaining term.
- Overpayments are applied every month without limit or penalty.
- Early repayment charges are not deducted.
- Interest is charged monthly on the reducing balance.
Amortisation Schedule
Overpayment facts
- What does overpaying £200 a month save?
- On a £250,000 mortgage at 5% with 20 years left, it saves £26,898.18 in interest and clears the loan 3 years 9 months earlier.
- Why do small overpayments save so much?
- Every extra pound reduces the balance that interest is charged on, for every month remaining — so an early overpayment saves interest many times over.
- Is there a limit on overpayments?
- Most lenders allow up to 10% of the balance each year without penalty. Above that, an early repayment charge can apply during a fixed deal.
- Is it better to overpay or to save?
- Compare your mortgage rate with the savings rate you could get after tax. Overpaying wins when the mortgage rate is higher, but savings stay accessible.
How Extra Mortgage Payments Cut Your Loan Term and Interest
Why Make Extra Payments?
Every extra dollar applied to your mortgage reduces the principal balance, which in turn reduces the interest charged the following month. Because mortgage interest compounds on the remaining balance, early extra payments have an outsized effect — saving several times their own value in future interest. Use the mortgage calculator to find your baseline monthly payment first.
Biweekly Payment Strategy
By splitting your monthly payment in half and paying every two weeks, you make 26 half-payments per year — equivalent to 13 full monthly payments instead of 12. This extra payment each year can cut several years off a 30-year mortgage and save tens of thousands in interest. The amortisation schedule calculator shows the full year-by-year payment breakdown.
Lump Sum vs Monthly Extra
A large one-time lump sum (e.g. a bonus or inheritance) applied early in the mortgage has a greater effect than the same total amount paid in small monthly increments spread over many years, because it reduces the compounding base immediately.
Monthly extra payments are easier to budget and still deliver significant savings over the life of the loan.
Before You Pay Extra
Check for prepayment penalties in your loan agreement. Also weigh the guaranteed return of paying down mortgage debt against other uses of that money — high-interest debt, emergency funds, and tax-advantaged retirement accounts may offer better value first. The investment calculator models the potential return from putting those funds to work instead.
Worked example
A £250,000 balance at 5% with 18 years remaining has a standard monthly payment of £1,650. Adding £200 extra per month reduces the balance faster: the mortgage is paid off 3 years 2 months early and total interest saved is £28,400 — a 17% reduction in interest cost for an outlay of just £200/month.
Evidence & Methodology
How This Page Is Grounded
Method
Projects the remaining balance month by month, applying interest before the scheduled and optional extra principal payment.
Important limitation: Assumes the rate and extra payment remain constant and that the lender applies overpayments directly to principal.
Primary Sources
- How mortgage amortization works Consumer Financial Protection Bureau
- Mortgage repayment calculator MoneyHelper
Quality Checks
Checked with no-overpayment, regular-overpayment and one-off-payment scenarios.
See how sources are selected and corrections are handled in our Editorial & Calculation Methodology, and which automated checks this page has to pass in How We Test.
Frequently Asked Questions
Why do extra mortgage payments save so much in interest?
Every extra payment reduces the principal balance, which reduces the interest charged the following month. Because mortgage interest compounds on the remaining balance, early extra payments save several times their own value in future interest — use the mortgage payoff calculator to see exactly how much your extra payments save.
What is the biweekly mortgage payment strategy?
By splitting your monthly payment in half and paying every two weeks, you make 26 half-payments per year — equivalent to 13 full monthly payments instead of 12. This one extra annual payment can cut several years off a 30-year mortgage and save tens of thousands in interest.
Is a lump sum payment better than paying a little extra each month?
A lump sum applied early has a greater effect than the same total paid in small monthly increments, because it immediately reduces the compounding base. Monthly extra payments are easier to budget and still deliver significant savings — the mortgage payoff calculator lets you compare both approaches.
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