Mortgage overpayment calculator

Interest is the money you pay a lender in return for borrowing from them. You’ll pay a percentage of the amount you borrowed – this is called the interest rate. You’ll typically want a low mortgage interest rate, as this means you’ll pay less to the lender in borrowing costs.

Interest rates are usually set by the lender, but they may follow or be influenced by the base interest rate set by the Bank of England.

There’s no exact number that makes a good interest rate. That’s because the interest rate you’ll pay depends on a lot of factors, like how much you’re borrowing and the size of your deposit.

The important thing is to make sure you’ll be able to afford the repayments – as you risk losing your home if not – and that the rate is competitive with what else is out there

Overpayments are when you voluntarily repay more than the monthly minimum amount.

Making overpayments means you’ll repay your mortgage quicker and pay less interest in total. But you should check you’re able to do this and won’t need to pay any early repayment charges or other fees.

When you remortgage, you either take out a new loan with your existing lender or with another company.

Many people remortgage because they want to get a better rate, change their interest rate type, increase or decrease their monthly payments, or free up equity (e.g. for home improvements).

Key things that will help you get a better mortgage deal:

• Improve your credit score: the higher your score, the better your chances of being accepted
• Reduce existing debt: if you can, pay off things like credit cards and loans before applying
• Save a larger deposit: the bigger your deposit, the lower risk you are to lenders

Don’t just look at what mortgages your bank offers. Compare deals from across the market to find the lowest rates. If you need help, a mortgage broker can find the best mortgage for your needs.

Overpaying your mortgage can save you serious money in the long term. This is because you don’t pay interest on the amount that you overpay. Use our mortgage overpayment calculator to see how much you could save.

Whether it's worth overpaying your mortgage depends on your circumstances. If you have high-interest credit card or loan debt for example, it’s usually best to pay that off first.

Remember some lenders have rules around overpaying and charge early repayment fees, so always check the lender’s rules first.