Mortgage Overpayment Calculator
Runs locallyInput stays in your browserFree, no sign-up
Paying a little extra each month saves more than interest — it saves years. Every extra payment goes straight to principal, so later interest is charged on a smaller balance, and more of each payment becomes principal. Many people only ask how much interest an extra 1,000 a month saves, and miss that it can shrink a 30-year loan into the low twenties — years at the end when no payment is due at all. The effect compounds because the loan is front-loaded with interest: early payments are mostly interest, so principal falls slowly at first — extra payments are the only way to break that pattern.
The calculation is a month-by-month simulation. The monthly payment comes from the standard amortization formula; each month's payment covers that month's interest first and the rest reduces principal; extra monthly payments and any lump sum go directly to principal. Original total interest = monthly payment × total months − loan amount; the overpaid total is the sum of monthly interest in the simulation. The difference is interest saved, and original term minus overpaid term is time saved. A lump sum applied at the start cuts the balance before any interest accrues on it, which is why timing matters as much as size: the same amount paid in year ten saves far less than in year one, because most of the interest it would have prevented has already been paid.
An example: a 1,000,000 loan at 3.5% over 30 years costs about 4,490 a month; adding 1,000 a month, with no lump sum, clears it 99 months early — about 8 years and 3 months — and saves about 188,000 in interest. Add a 200,000 lump sum plus 500 extra a month and the saving stretches to 143 months and about 337,000 in interest. The earlier extra money goes in, the more it saves.
Two boundaries matter. This tool ignores early-repayment penalties and bank fees, so check your loan contract before acting. And the rate is held fixed in the simulation; a floating-rate loan will land somewhere nearby, not exactly here. The result is an estimate, not loan or financial advice. The smoothest workflow is to work out the payment with the mortgage calculator first, then run the overpayment math here. Use the two headline numbers together: time saved tells you when the monthly obligation ends, interest saved tells you what that freedom is worth, and the gap between original and overpaid total interest is the price of borrowing that you avoid.
How to use
- Enter loan amount, mortgage annual rate, and loan term (check the payment with the mortgage calculator first).
- Enter the extra amount you will pay each month (0 means no extra monthly payment).
- Enter any one-time lump-sum overpayment (0 means none).
- Read time saved and interest saved, plus total interest before and after overpaying.
- Adjust the extra amounts and watch how time and interest saved move, then decide how much extra to pay.
FAQ
Which saves more: extra monthly or a lump sum?
The earlier money goes in, the more it saves: an early lump sum usually beats the same amount spread monthly, but monthly extras win on sustainability — and the two stack.
Why does a little extra save whole years?
Extra payments cut principal directly, so later interest shrinks and more of each payment becomes principal — an accelerating loop that bites hardest late in the loan.
How are the saved final years counted?
Original term minus overpaid term is time saved — months at the end when no payment is due, freeing that monthly amount for other uses.
Are there early-repayment penalties?
Some banks and contracts charge them, and this tool does not include them — check your loan contract's early-repayment terms first.
What if my rate floats?
This tool holds the rate fixed. A floating rate lands nearby rather than exactly here; the direction is unchanged, and the bank's actual settlement governs.