How does mortgage overpayment save money?

Overpaying reduces the outstanding balance immediately. Because mortgage interest is charged on the remaining balance, every overpayment saves you interest for every remaining month of the loan. A £100/month overpayment on a £200K, 25-year, 5% mortgage saves around £30,000 of interest and cuts ~4 years off the term.

What is the 10% overpayment limit?

Most UK fixed-rate mortgages let you overpay up to 10% of the outstanding balance per year without penalty. Overpaying more during the fixed period typically triggers Early Repayment Charges (ERCs) of 1–5% of the overpayment amount. Variable and tracker mortgages usually have no overpayment cap.

Should I overpay or invest the money instead?

It depends on your mortgage rate vs. your expected after-tax investment return. If your mortgage rate is 5% and you can earn a guaranteed 5%+ in a cash ISA, investing the money is roughly equivalent. If your mortgage is at 6%+ and you'd invest in volatile assets, overpaying typically wins on a risk-adjusted basis. Also consider tax — ISA returns are tax-free; mortgage savings effectively are too.

Lump sum vs monthly overpayment — which is better?

A lump sum saves more total interest because it reduces the balance immediately and for the entire remaining term. Monthly overpayments build up gradually but are easier to budget. Many people do both — annual bonus as lump sum + small monthly overpayment.

Does overpaying reduce my monthly payment or shorten the term?

Most UK lenders give you the choice. "Reduce term" keeps your monthly payment the same and shortens the mortgage — this saves the most interest. "Reduce monthly payment" lowers each payment but keeps the original end date. For maximum savings, choose reduce term.

💸 Realkreditlåns-overbetaling-lommeregner

See how much interest and time you save by overpaying — either monthly extra payments or a one-off lump sum. Side-by-side with vs. without overpayment.

Valuta

Outstanding mortgage (£)

Rentesats (%)

Remaining term (years)

Månedlig overbetaling (£)

Éngangs engangsbeløb overbetaling (£, valgfrit)

⚠️ Check your mortgage T&Cs first. De fleste UK fastrentaftaler tillader 10% overbetaling om året uden ERC. At overskride grænsen koster typisk 1–5%. Kapital er i risiko. Tænk grundigt over at sikre gæld mod din bolig.

Sådan fungerer realkreditlånsoverbetaling

When you overpay, the extra money goes directly to reducing the principal balance — not the interest. Because interest is calculated on the outstanding balance each month, every pound of overpayment reduces all future interest charges for the remainder of the term. The earlier in the mortgage you overpay, the bigger the saving.

Beregnet eksempel

Et realkreditlån på £200.000 til 5%, 25-årig løbetid har månedlige betalinger på £1.169 og samlet rente på £150.754. Tilføj en månedlig overbetaling på £200 og du betaler det af på 20 years 7 months, og sparer ca. £31,000 i rente. Tilføj et engangsbeløb på £10.000 oven på og du sparer tættere på £42,000.

Reducer løbetid vs. reducer betaling

Most UK lenders let you choose what to do with overpayments:

Reduce the term — keep paying the original monthly amount, finish years earlier, save the most interest
Reduce monthly payment — pay less each month, keep the original end date, save less interest but lower immediate cash flow

For maksimale besparelser skal du vælge reduce term. Nogle långivere anvender automatisk ekstrabetalinger som en betalingsreduktion, medmindre du specifikt beder om andet – ring til dem for at bekræfte.

Skal jeg overbetalte eller spare/investere?

Hvis din realkreditrente er higher end din garanterede opsparingsrente (efter skat), overbetal
If you have no emergency fund (3–6 months expenses), prioritise that first
If you have high-interest debt (credit cards, personal loans) clear those before overpaying mortgage
If your employer matches pension contributions, max those first — it's effectively free money
Above £85K savings, FSCS protection caps — consider a mix of overpayment and ISAs

⚠️

Vigtig bemærkning: Always check your mortgage agreement and call your lender before overpaying significant amounts. Confirm whether the overpayment will reduce your term or your monthly payment — these have very different outcomes. Not financial advice.

Relaterede lommeregnere

Mortgage Repayment Calculator — Månedlige betalinger, samlet rente og fuld amortiseringsplan.
Mortgage Affordability — How much can you borrow? Income multiple, stress test and LTV.
Buy vs Rent Calculator — Sand samlet omkostning ved at købe versus leje over enhver tidshorisont.