After writing the Mortgage Overpayments article, where I discuss what, where and how, I decided to put together this overpayment mortgage calculator, so anyone can quickly and easily calculate how much they can save by making regular or a one-off lump-sum overpayment.
The tool calculates how much you can save, along with how much time you will be shaving off your mortgage.
Generally, most lenders allow borrowers that are still with in their fixed period can make a 10% penalty-free overpayment ‘per mortgage anniversary year’ (i.e. without incurring an early repayment charges). While the rest, those that are out of the fixed rate period and onto the lender’s standard variable rate, typically don’t have a limit to how much they can overpay (but still might be subject to a fixed-rate early repayment charge, which usually doesn’t amount to much).
Lenders have been known to calculate the 10% threshold quite differently from one another. For example, ‘Lender A’ may allow you to make a 10% overpayment based on the overall loan value, while ‘Lender B’ may only allow you to make a 10% overpayment based on the remaining balance (which means the penalty-free limit goes down each year). Some lenders also allow you to carry over the penalty-free allowances to the following year if it’s not used.
Point is, before overpaying your mortgage, check that your lender allows you to overpay it penalty-free, and if there are any limits as to how much you can overpay.
Important: Please note, this information is computer-generated and relies on certain assumptions (e.g. interest rate will remain the same). It has only been designed to give a useful general indication of costs.
It’s important you always get a specific quote from the lender and double-check the price yourself before acting on the information. We cannot accept responsibility for any errors.
How much can you save?
Please, let me know what the calculator comes back with and how much you can potentially save, I’d really love to hear. Are you going to make the overpayment?