UK Mortgage Overpayment Calculator — Methodology

Last verified 5 May 2026 against FCA MCOB and standard amortisation maths. Calculator at /uk/property/mortgage-overpayment-calculator/.

What this calculator does

Models the interest savings and term reduction from making either monthly or one-off overpayments on a UK repayment mortgage. Uses standard amortisation with monthly compounding.

The formula

Monthly rate:   r = APR / 12
Standard payment for term n (months) and balance P:
  M = P × r / (1 - (1 + r)^-n)

Each month:
  interest = balance × r
  principal = M + extraMonthly - interest
  balance  -= principal
  if oneOff applies this month: balance -= oneOff

Iterate until balance ≤ 0.
totalInterest = sum of monthly interest charges
monthsSaved   = originalTermMonths - actualMonthsTaken

Authoritative sources

• FCA MCOB rules (mortgage conduct of business)
• MoneyHelper — mortgage overpayments

Assumptions and limitations

• Assumes a standard repayment (capital + interest) mortgage with monthly compounding and constant interest rate.
• Does not model lender-specific early repayment charges (ERCs) — most lenders allow 10% per annum without penalty.
• Does not account for offset accounts or interest-only mortgages.
• Interest is debited monthly in arrears; daily-interest calculations may differ slightly.
• Assumes overpayments reduce term, not monthly payment (the more common election in the UK).

Source data

This calculator is rate-free — it does not depend on a tax-year rate table. The methodology and assumptions above are the source of truth.

Verification log

• 5 May 2026: Amortisation logic reviewed during audit cycle 5; rate-free calculation