An extra £100 a month sounds modest beside a mortgage balance. Over years, though, it can make a meaningful difference because reducing the balance sooner also reduces future interest. Whether it is worth it for you depends on your mortgage rate, deal restrictions, savings buffer and other financial priorities.
A worked example: £200,000 mortgage at 5%
Imagine a £200,000 capital-and-interest mortgage with 25 years remaining and an assumed fixed 5% annual rate throughout. The normal monthly payment is about £1,169. The following figures assume payments are made monthly, the overpayment starts immediately, the normal payment is maintained and there are no fees or penalties.
| Extra per month | Approx. payoff time | Total interest | Interest saved |
|---|---|---|---|
| £0 | 25 years | £150,754 | — |
| £50 | 23 years 1 month | £137,340 | £13,415 |
| £100 | 21 years 6 months | £126,249 | £24,505 |
| £200 | 18 years 10 months | £108,911 | £41,843 |
In this example, £100 extra per month cuts roughly three years and six months off the term and saves about £24,505 in interest. The final payment is smaller than a normal monthly payment, and figures are rounded. A real mortgage's rate may change, so actual savings will differ.
Why overpayments save interest
Interest is usually calculated on the outstanding mortgage balance. If you reduce that balance sooner, less interest accrues later. The benefit compounds over time because more of subsequent payments goes towards the amount owed. You can experiment with your own balance, rate and term using the free mortgage overpayment calculator.
What about a one-off lump-sum mortgage overpayment?
Not everyone wants to overpay every month. If you receive a bonus or have money set aside, you might compare adding £100 each month with paying a single £5,000 lump sum. These are not equal contributions: £100 a month adds up to £1,200 in a year, while £5,000 is paid at once. To make a fair comparison, look at both the amount paid and when it reaches the mortgage balance.
A lump sum made early may reduce interest sooner; monthly payments can be easier to budget. The outcome depends on your remaining balance, interest rate, term, payment timing and whether the lender keeps your regular payment unchanged.
Read our monthly versus lump-sum comparison →, or try the free mortgage overpayment calculator → to explore your own illustrative scenarios.
Check your mortgage terms for overpayment allowances, early repayment charges and how your lender applies additional payments. This is general information, not personal financial advice.
Three things to check first
Early repayment charges and allowances. Many mortgage deals restrict how much you can overpay without a charge. The allowance, how it is measured and whether unused allowance carries over depend on your agreement. Check your lender's terms before paying extra.
Emergency savings. Money paid into your mortgage is often less accessible than cash savings. If you might need it for an emergency, keeping an accessible buffer may matter more than maximising interest savings.
Other debt and alternatives. Higher-interest debt may cost more than your mortgage. Some people also weigh overpayments against savings or investing, but investments can fall as well as rise. Read our overpay or invest comparison for the trade-offs.
What if your mortgage rate changes?
The worked example deliberately holds the interest rate constant for the full term so you can see the mathematical effect. In reality, UK mortgage rates commonly change when deals expire. If your rate rises, overpayments may save more interest; if it falls, they may save less. Re-run your numbers when your mortgage terms change.
Sources and methodology: Calculations use a standard monthly amortisation schedule: monthly interest on the remaining balance, a constant normal repayment, and optional extra repayments reducing principal. Rounded to the nearest pound; no fees or penalties included. For independent information see MoneyHelper and FCA mortgage guidance. Reviewed for clarity 12 October 2026; lender-specific overpayment rules have not been verified.
Educational illustrations, not personal financial advice. Check your mortgage agreement before making overpayments.
