Mortgage Part Repayment Calculator
Calculates how a mortgage part repayment changes your monthly payment or remaining term, and the interest saved by each option.
For a mortgage with 20 years (240 monthly payments) still to run, using a part repayment to shorten the term saves more total interest than using the same sum to lower the monthly payment. The gap tends to widen as the remaining term and the interest rate grow, since every month the balance stays high adds more interest to the schedule.
A part repayment, often called an overpayment, is a sum paid to the lender on top of your normal monthly payment. Unlike a regular payment, which is split between interest and capital, the whole of a part repayment goes towards reducing the balance. Early in a mortgage, most of each regular payment is interest, so a reduction made at that stage prevents more future interest from building up than the same sum made near the end.
Once the repayment is made, there are two ways to recalculate the loan. You can keep the same end date and accept a lower monthly payment, which frees up cash each month. Or you can keep the monthly payment unchanged and finish the mortgage earlier, which removes the final payments from the schedule. This calculator shows both options side by side, with the interest saved in each case, so you can see the trade-off using your own figures.
The result is fixed by the standard repayment formula. Once the outstanding balance, the remaining term and the interest rate are known, the effect of a part repayment can be worked out exactly. The most common input error is entering the original loan amount rather than the balance still owed, which gives a result for a mortgage you no longer have.
All figures are estimates. They assume the interest rate stays the same for the rest of the term, which does not hold for a variable rate, and they leave out insurance, fees and any early repayment charge set by your lender. Check your mortgage offer and the lender's terms before you make a payment.
The explanation below uses metric units; the calculator works in either system.
The result updates automatically.
The loan balance still owed to the lender
Number of years left on the agreement
The reference rate the loan is linked to
The margin the lender adds on top of the reference rate
The amount you want to pay off early
Determines the maximum legally permitted early repayment charge
Option A: lower the repayment (same term)
New monthly repayment
Repayment recalculated after the overpayment, using the standard repayment method
- Monthly reduction
- £55.02
- Interest saved (option A)
- £6,505
Option B: shorten the term (same repayment)
New term
Time left on the agreement after the overpayment, keeping the same repayment
- Time saved
- 3 years and 6 months
- Interest saved (option B)
- £17,729
- Current repayment
- £660.21
- Nominal interest rate (NIR)
- 4.40 %
- Maximum early repayment charge
- £50.00
How it works
Formula
How the calculation works
Mortgage Part Repayment: Lower Payment or Shorter Term?
Many homeowners who have savings or a windfall ask the same question: should the money go towards the mortgage, and if so, which option is better? The answer depends on personal priorities, but the arithmetic is fixed. Once the outstanding balance, the remaining term and the interest rate are known, the effect of any part repayment can be calculated exactly.
What a part repayment does
A part repayment is a lump sum paid to the lender on top of the regular monthly payments. The whole amount reduces the capital owed. Nothing is set aside as interest, which is why an overpayment reduces future interest more directly than a regular payment does.
A standard repayment mortgage uses a level-payment schedule. Each month, the payment covers the interest charged on the balance and the rest reduces the capital. In the early years most of the payment is interest, and the share going to capital grows over time. This is why a part repayment made early in the term has a larger effect on total interest than the same sum paid near the end, when the balance is already small.
The two options after a part repayment
Once the lender applies the repayment, the loan can be recalculated in one of two ways.
Option A keeps the end date and lowers the monthly payment. The lender recalculates the payment on the smaller balance over the number of payments that remain. The payment falls, which releases cash for savings, other debts or household costs. Interest is saved in every remaining month, but the loan still runs for the full remaining term, so the total saving is usually smaller than in Option B.
Option B keeps the monthly payment and shortens the term. The loan ends earlier, and the final payments disappear from the schedule. Because the payment is fixed, the balance reaches zero sooner, so interest stops building up on it sooner. For the same sum repaid, this option usually saves more total interest. The difference narrows when only a short term remains, because there are few payments left to remove.
The choice is also a question of risk and flexibility. Option B shortens the period during which a variable rate can move against you, and it clears the debt sooner. Option A gives more monthly flexibility, which matters if income is tight or other household costs are rising.
How the formula works
The monthly payment formula is PMT = C × [r × (1+r)^n] / [(1+r)^n − 1]. Here C is the balance, r is the monthly interest rate and n is the number of monthly payments. The monthly rate is the annual nominal rate divided by 12, which is the same as dividing a percentage rate by 1200 when the rate is written as a whole number. The formula gives the level payment that clears the balance exactly over n payments.
Option A applies the same formula to the new balance C', keeping n unchanged, which gives the new payment PMT'. Option B rearranges the formula to solve for the number of payments while keeping the original payment PMT. The rearranged form is n' = −ln(1 − C' × r / PMT) / ln(1 + r). The logarithm is always defined for a repayment mortgage, because the original payment is larger than the interest on any smaller balance. If the part repayment clears the balance completely, the term inside the logarithm becomes 1, and the number of remaining payments is zero.
The formula assumes a fixed interest rate for the whole remaining term. If the rate is variable, future payments will change with it, so the results show your position at today's rate rather than a forecast.
Early repayment charges
Lenders may charge a fee for repaying part of a mortgage early. The charge is set by the product and the lender, and it is written into the mortgage offer. Many products allow overpayments up to an annual limit without a charge, so only the amount above that limit is charged. Fixed-rate and tracker deals often have a charge period, and the charge can differ at different points in the deal.
A charge can cancel out the saving. This is most likely when the remaining term is short or the overpayment is large relative to the annual allowance. Before making a part repayment, compare the charge with the interest saved over the remaining term, using the figures in your offer rather than general assumptions.
When a part repayment makes sense
A part repayment usually suits households that already have an emergency fund, do not carry more expensive debt, and have a long remaining term on the mortgage. It is also worth considering when the money has no better use and the charge is zero or small.
When not to use a part repayment
Do not put money into the mortgage if it would leave you short of cash for emergencies, if you expect to move house within a charge period, or if you may need to borrow again soon. Capital locked in a home is harder to withdraw than savings. It is also sensible to check whether a different deal offers a better rate, because switching has its own fees.
Common mistakes
Four errors affect results more than any other:
- Entering the original loan amount instead of the balance still owed, which is shown on your latest statement.
- Entering the original term instead of the remaining term.
- Assuming the lender will recalculate the payment in the way you prefer, when the choice needs to be confirmed with them.
- Forgetting the early repayment charge, which can reverse the result when the remaining term is short.
Scope and limitations
The calculator follows the capital and interest schedule of a repayment mortgage. It does not cover interest-only mortgages, payment holidays, split or mixed rate deals, mortgage protection insurance, buildings insurance, arrangement or valuation fees, or any tax position. Each of these can change the true cost of borrowing, so treat the output as an estimate for comparing options rather than as a quote.
Where to check your figures
Your latest statement and mortgage offer give the current balance, the remaining term and the rate. The Bank of England publishes Bank Rate and SONIA, a reference rate used in some UK mortgage products. The Financial Conduct Authority regulates mortgage lending and maintains the Financial Services Register, where you can confirm that an adviser is authorised before you take advice.
Frequently asked questions
What is the difference between a part repayment and a full early repayment?
A part repayment, or overpayment, is a lump sum paid on top of your usual monthly payments. It reduces the balance, and the mortgage carries on under the same contract. A full early repayment clears the whole balance, which ends the mortgage before the agreed date. Either can trigger an early repayment charge if it falls outside the rules in your mortgage offer. Ask your lender for a redemption statement if you plan to clear the full balance.
Do I need to tell my lender before making an overpayment?
Many lenders accept overpayments without notice up to an annual allowance, but the rules come from your mortgage offer and account terms rather than a general rule. Check the allowance, any notice period and whether the payment has to be made on a set date. Paying above the allowance can trigger an early repayment charge, so confirm the amount before you pay.
Is it better to lower the monthly payment or shorten the mortgage term?
For the same sum repaid, shortening the term usually saves more total interest, because the fixed payment clears the balance sooner. Lowering the monthly payment keeps the same end date but frees up cash each month. Choose the term option if clearing the debt sooner matters most, and the payment option if you need more room in your monthly budget.
Are early repayment charges the same for every mortgage?
No. Charges depend on the product, the lender and the stage of the deal. Fixed-rate and tracker deals often have a charge period, and the charge can change during that period. Your mortgage offer and product terms state the charge, when it applies and how it is calculated. Check these before making a large part repayment, because a charge can outweigh the interest you would save when the remaining term is short.
Does a part repayment lower my monthly payment automatically?
Not necessarily. Some lenders recalculate the payment automatically, some keep the payment and shorten the term, and some ask you to choose. Contact your lender once the overpayment has been credited to the account. Confirm which option applies, and ask for the revised monthly payment and the new end date in writing so there is no doubt later.
Does the calculator include insurance, fees or interest-only loans?
No. The results show the capital and interest schedule only. They do not include mortgage protection insurance, buildings or contents insurance, arrangement or valuation fees, or any early repayment charge. Interest-only mortgages do not repay capital through the monthly payment, so the repayment formula does not apply to them. Use the results to compare options, then check the final figures against your mortgage offer.
Who can help me compare the options before I repay early?
A mortgage adviser authorised by the Financial Conduct Authority can compare the options using your full contract, including charges and any other deal you could move to. You can confirm that an adviser is authorised on the Financial Services Register. Advice may carry a fee, so ask how it is charged before you book an appointment.
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By RivoCalc · Reviewed under our editorial methodology · Updated 10 July 2026
This calculator provides an estimate for information only and does not constitute financial advice. Actual figures depend on your mortgage offer, your lender's terms and your personal circumstances. Before making a part repayment, check any early repayment charge, and speak to a mortgage adviser authorised by the Financial Conduct Authority if you need personalised advice.