Extra Mortgage Payment Calculator
A guaranteed, tax-free return at the mortgage rate.
Work out Extra Mortgage Payment. A guaranteed, tax-free return at the mortgage rate. Names the misconception directly.
Time saved
8.7 years
61,161 of interest avoided for 51,200 of overpayment
Overpaying earns exactly the mortgage rate, risk-free and tax-free. That is the comparison worth making: to beat a 5% mortgage, a taxable investment has to return well above 5% — often 7% or more once tax is counted — with risk attached. The effect is front-loaded. An overpayment in year one removes thirty years of compounding interest on that amount; the same overpayment in year twenty-five removes five. Early overpayments are worth several times what late ones are. Two practical checks before doing it: whether your lender charges early repayment penalties, and whether you have an emergency fund. Money in a mortgage is very hard to get back out, and the guaranteed return is worth less than accessible cash when something goes wrong.
How the Extra Mortgage Payment Calculator works
How much time and interest an overpayment removes, and what return it earns. Overpaying yields exactly the mortgage rate, risk-free and tax-free — which is a higher hurdle than it looks.
Also known as: should i overpay my mortgage · pay off mortgage early calculator · how much does 200 a month save · overpay or invest
Not financial advice. This calculator is for planning and illustration, not financial advice. Real products carry fees, taxes, and terms it does not model. Confirm figures with your lender or a qualified adviser before committing.
Frequently asked questions
How much does overpaying save?
On a 200,000 mortgage at 5% over 30 years, an extra 200 a month cuts about six years off the term and saves roughly 50,000 in interest.
What return does overpaying earn?
Exactly the mortgage rate, risk-free and tax-free. To beat a 5% mortgage, a taxable investment has to return well above 5% — often 7% or more once tax is counted — with risk attached.
Is it better to overpay early or late?
Early, by a wide margin. An overpayment in year one removes thirty years of compounding interest on that amount; the same overpayment in year twenty-five removes five.
Should I overpay or invest?
Compare the mortgage rate against the after-tax return you realistically expect, and weigh the certainty. Overpaying is guaranteed; investing is not, and the gap has to be large enough to pay for that risk.
What should I check first?
Early repayment charges, and whether you have an emergency fund. Money put into a mortgage is very hard to get back out, and accessible cash is worth more than a guaranteed return when something goes wrong.
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