PilotRate
Back to Mortgage Calculator

UK Prepayment Simulator

See how extra overpayments reduce your mortgage term and how much interest you save, including Early Repayment Charges (ERCs) on excess overpayments.

Loan Details

£
£100,000£3,000,000
£
£17,500£350,000
%
0.5%15%
yrs
5 yrs35 yrs
/ 5
1 / 55 / 5

What year of your fixed-rate deal are you in?

Overpayment

£
£0£100,000
In the UK, you can overpay up to 10% of your initial mortgage balance each year without incurring Early Repayment Charges. Overpayments beyond this limit are subject to ERC based on your current fixed-rate deal year.

Balance Comparison

Over 25 years
Without Overpayment
With Overpayment

Impact Summary

Interest Saved

£69,076

Total overpayments: £85,000

Years Saved

8.2 yrs

Payoff Without Overpay

August 2051

Payoff With Overpay

August 2042

Total Cost Without Overpay

£466,899

Total Cost With Overpay

£399,379

Monthly Payment

£1,556

PilotRate provides educational mortgage estimates and does not constitute financial advice.

UK Mortgage Prepayment — Frequently Asked Questions

Can I overpay my UK mortgage without penalty?
Most UK fixed-rate mortgages allow overpayments of up to 10% of the outstanding balance per year without penalty. Tracker and variable-rate mortgages often have more generous limits. Overpaying beyond the limit may trigger an early repayment charge (ERC) of 1% to 5% of the overpaid amount. Our calculator helps you optimize overpayments within penalty-free limits.
How much can I save by overpaying my UK mortgage?
Overpaying by £200 per month on a £250,000 mortgage at 4.5% can save over £40,000 in interest and reduce your term by approximately 6 years. Even the maximum 10% annual overpayment allowance can dramatically reduce total interest. Our simulator shows the exact savings for your specific mortgage.
What is an early repayment charge (ERC) in the UK?
An early repayment charge (ERC) is a penalty for overpaying beyond your allowed limit or repaying your mortgage entirely during the fixed-rate period. ERCs typically range from 1% to 5% of the amount repaid and decrease each year of the fixed term. Some mortgages have ERC-free overpayment allowances of 10% annually.
Should I overpay my mortgage or invest the money in the UK?
The decision depends on your mortgage rate versus expected investment returns and your tax situation. With current UK savings rates around 4% to 5% in ISAs, the gap between mortgage rates and savings returns has narrowed. Overpaying provides a guaranteed return and reduces financial risk. Consider using your ISA allowance first for tax-efficient investing.
How does overpaying affect my mortgage term and monthly payment?
Overpaying reduces your outstanding principal, which shortens your mortgage term and reduces total interest. Your regular monthly payment typically stays the same unless you formally recalculate with your lender. Some lenders allow you to reduce your monthly payment instead of shortening the term after a lump-sum overpayment.