Question 1

Is it worth overpaying my mortgage?

Accepted Answer

Generally yes, if your mortgage interest rate exceeds the interest you would earn on savings after tax. Every £1 of overpayment reduces the balance on which future interest compounds, saving more over time. The calculator shows exactly how much interest and time you save.

Question 2

What is an Early Repayment Charge (ERC)?

Accepted Answer

An ERC is a penalty charged by lenders if you repay more than your agreed annual overpayment allowance during a fixed-rate period. It is typically 1–5% of the excess amount. Most lenders allow overpayments of up to 10% of the outstanding balance per year without charge.

Question 3

How much can I overpay my mortgage each year without penalty?

Accepted Answer

Most UK lenders allow overpayments of up to 10% of the outstanding mortgage balance per year during a fixed-rate deal. Check your mortgage offer or contact your lender — the exact limit varies. Variable rate and tracker mortgages often have no overpayment limit.

Question 4

Can I overpay an interest-only mortgage?

Accepted Answer

Yes. On an interest-only mortgage, your regular payments only cover interest — the capital balance never reduces unless you make overpayments. The calculator models interest-only overpayments, showing how each extra payment reduces the outstanding balance and future interest.

Mortgage Overpayment