Mortgage Overpayment Calculator
Mortgage Overpayment Calculator
Step 1: Enter the Mortgage Amount (£)
This calculator helps you estimate how much interest you can save and how much time you can shave off your mortgage term by making one-off and recurring overpayments. Follow these steps to make the most of it:
In the first field, enter the total mortgage amount that you originally borrowed.
- Example: If your mortgage amount is £200,000, type “200000.”
Step 2: Enter the Mortgage Term (Years)
Next, input the number of years over which you have agreed to repay your mortgage.
- Example: For a 25-year mortgage, enter “25.”
Step 3: Input the Interest Rate (%)
In this field, enter the annual interest rate that applies to your mortgage.
- Example: If your interest rate is 4.5%, input “4.5.”
Step 4: Enter the One-off Overpayment (£)
In this field, input the amount of any lump-sum overpayment you plan to make. A one-off overpayment is a single large payment that reduces your mortgage balance.
- Example: If you plan to make a one-time payment of £5,000, enter “5000.”
Step 5: Input the Recurring Overpayment (£ per month)
In the next field, enter the amount you plan to overpay on your mortgage each month, in addition to your regular monthly mortgage payments.
- Example: If you want to overpay an extra £200 every month, input “200.”
Step 6: Click “Calculate Savings”
Once you’ve entered all the values, click the Calculate Savings button. The calculator will compute how much interest you’ll save over the term of your mortgage and how much sooner you’ll be able to pay off your loan by making the overpayments.
Step 7: Review the Results
After clicking the button, the results will be displayed in the Results section at the bottom of the calculator. The results will include:
- Total Interest Saved: This is the amount of interest you save by making overpayments, compared to not making any overpayments.
- Time Saved: This shows how many years and months you will shorten your mortgage term by making the overpayments.
Example:
Let’s assume you enter the following values:
- Mortgage Amount: £200,000
- Mortgage Term: 25 years
- Interest Rate: 4.5%
- One-off Overpayment: £5,000
- Recurring Overpayment: £200 per month
After calculating, you might see that you save £30,000 in interest and pay off your mortgage 3 years and 5 months earlier than if you hadn’t made overpayments.
Benefits of Using the Mortgage Overpayment Calculator:
- See Savings: Find out how much interest you can save by paying extra toward your mortgage.
- Visualize Time Savings: Understand how much faster you can pay off your mortgage by making additional payments.
- Plan Overpayments: You can experiment with different amounts of one-off and recurring overpayments to see how they affect your mortgage.
Using this calculator can give you a clearer picture of how overpaying on your mortgage can benefit you financially. Make sure to update your inputs as your mortgage details or overpayment plans change!