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Mortgage payoff calculator

See how overpayments cut years and interest off your mortgage.

  • Answers as you type
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% / year
years

Paid every month on top of the scheduled amount.

A single lump sum, e.g. a bonus.

1 = straight away

Interest saved

$38,457.87

5y 1m earlier

Scheduled payment
$1,389.58
New monthly payment
$1,589.58
Interest without overpaying
$166,874.36
Interest with overpayments
$128,416.49
Paid off in
19.9 years

Balance over time

Year 10 – 244,462Year 20
With overpaymentsWithout overpayments

How it works

Start from the balance you actually owe today, not the original loan. Add a monthly overpayment, a one-off lump sum, or both, and compare the payoff date and total interest against doing nothing.

Each month: Interest = Balance × monthly rate; the rest of the payment (plus any overpayment) comes off the balance. Overpayments remove all the future interest that part of the balance would have generated.

Example: 250,000 over 25 years at 4.5% costs 1,389.58 a month and 166,874 of interest. Overpaying 200 a month saves about 38,458 of interest and clears the loan 5 years and 1 month early.

Why overpaying works so well, how monthly extras compare with a lump sum, and what to check with your lender before you start.

Why a small overpayment does a large amount of work

Every month your payment splits into interest on the current balance and a slice of capital. An overpayment skips the interest part entirely: the whole amount comes straight off the balance. From then on, that part of the debt generates no interest for the rest of the term, which is why an overpayment is worth far more than its face value.

Timing matters more than size. An overpayment in year one avoids decades of interest; the same amount in the final year avoids almost none. This is the compounding effect running in reverse, and it is the single most useful thing to understand about paying a mortgage off early.

Monthly extra or one-off lump sum?

Both work the same way, so the real question is which you can sustain. A monthly extra builds the habit and smooths the benefit; a lump sum from a bonus, inheritance or savings bites immediately and usually saves slightly more than the same total dripped in over time, because the balance falls at once.

The strongest setup for most households is a modest monthly overpayment plus lump sums whenever spare cash arrives. The calculator above models both at once so you can see the combined effect.

Three overpayment strategies on a 250,000 balance over 25 years at 4.5%
StrategyInterest savedPaid off early by
No overpaymentsnonenone
200 extra every month≈ 38,4585 years 1 month
Single 10,000 lump sum in month 12≈ 18,3331 year 8 months
200 a month plus the 10,000 lump sum≈ 51,1886 years 4 months
Three overpayment strategies on a 250,000 balance over 25 years at 4.5% — Figures from the calculator above, rounded. Your numbers will differ, but the pattern holds: combining both strategies beats either alone.

What to check before you overpay

  • Early repayment charges. Many fixed deals cap penalty-free overpayments, often at about 10% of the balance per year. Exceeding the cap can trigger a fee that eats the benefit.
  • Your emergency fund. Money paid into a mortgage is hard to get back. Keep three to six months of costs accessible first.
  • More expensive debt. Credit cards and personal loans almost always charge more than a mortgage, so clear those first.
  • Payment recalculation. Some lenders lower your required payment after an overpayment, which stretches the term back out. Ask them to keep the payment unchanged if your goal is an early payoff.
  • Savings rates. If a savings account pays more after tax than your mortgage rate, parking the cash there can beat overpaying.

Reading the results

The headline figure is the interest saved: the difference between the total interest you would pay on schedule and the total with your overpayments included. Beneath it, the payoff line shows the new term in years, and the chart draws both balance paths so you can see where the gap opens up.

Treat the results as a model, not a promise. The tool assumes your rate stays the same for the whole term, while real mortgages refix every few years. Re-run the numbers whenever your rate changes.

Questions people ask

Is it better to overpay monthly or with a lump sum?

Both come straight off the balance, so earlier is what matters most. A lump sum today usually beats the same amount dripped in monthly, because the balance (and therefore the interest) falls immediately.

Are there limits on overpaying my mortgage?

Often, yes. Many lenders cap penalty-free overpayments, commonly around 10% of the balance per year during a fixed period. Check your terms before paying a large lump sum.

Should I overpay or save the money instead?

Compare the mortgage rate with what your savings earn after tax. If the mortgage rate is higher, overpaying usually wins; if savings pay more, keeping the cash can be better. Keep an emergency fund either way.

Does overpaying lower my required monthly payment?

Not automatically on most repayment mortgages. It shortens the term instead. Some lenders will recalculate the payment on request, which undoes part of the benefit.

How much should I overpay?

Whatever is comfortably repeatable. Even 50 a month makes a visible dent over a long term; the calculator shows the effect of any amount before you commit to it.

Does overpaying hurt my credit score?

No. Overpaying a mortgage is not reported negatively; if anything, a falling balance relative to the property value strengthens your position when you remortgage.

Related calculators

Mortgage calculatorHouse price, deposit and rate to a monthly figure.
Amortization schedulePayment-by-payment breakdown, with overpayments.
Interest-only paymentThe monthly cost when nothing is repaid.

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