Mortgage Payoff Calculator

The one question this calculator answers

Two mortgages with the same balance, rate and term always finish on the same date, provided nothing extra is paid. The moment spare cash goes toward the balance, that stops being true, and working out by how much needs a full simulation, not a guess. This calculator takes the mortgage exactly as it stands today, the amount still owed, the rate actually being paid, and the time left on the term, and asks one question: add an extra monthly amount, a lump sum today, an extra amount once a year, or any mix of the three, and how many months sooner does it end, and how much interest does that avoid? It does not also try to be a full amortisation schedule or a rate comparison; the Amortization Calculator covers the payment-by-payment detail and the crossover point instead.

The current balance, rate and term are enough on their own, without the original loan amount or a start date, because they already contain everything about the mortgage's history that matters for what happens next. Two people who borrowed different amounts on different days, but who both owe £200,000 at 5% with 25 years left, are in an identical position from today onward.

How the required payment and the simulation work

The required monthly payment on a standard repayment mortgage comes from one formula:

Feed this calculator's own defaults into it, a £200,000 balance at 5% with 25 years left, and n is 300 monthly payments, r is 0.4167% a month, and the formula returns £1,169.18. That figure never changes just because extra is paid; overpaying does not lower the contractual payment, it shortens how long the mortgage runs for instead. From there, two real month-by-month simulations run rather than a second formula, because a lump sum or a once-a-year amount changes the balance unevenly in a way no single equation captures cleanly. The first, paying as scheduled, applies only the required payment until the balance reaches zero. The second, the accelerated plan, adds the extra monthly amount every time, the lump sum once at the very start before the first month's interest is even charged, and the extra-annual amount on every twelfth payment. Comparing how many payments each takes, and how much interest each charges in total, gives the months and interest saved shown at the top of the page.

On the default plan, £200,000 owed at 5% with 25 years left, an extra £200 a month cuts the term by 6 years 2 months and saves £41,842.60 in interest, for a payment increase of well under a fifth of the required £1,169.18. A £20,000 lump sum today, with no monthly extra at all, cuts 4 years 5 months and saves £42,323.45, a similar result from a single payment rather than a habit. Set both at once and the term shortens by 9 years 1 month, saving £69,440.72, more than either change alone but less than the two savings simply added together, because some of the same future interest can only be avoided once, whichever lever removes it first. The balance chart above plots this directly: a slower grey line for paying as scheduled and a faster green line for the accelerated plan, meeting zero however many months apart the two simulations actually land.

Why an early pound does more than a late one

Interest on a repayment mortgage is charged only on the balance still outstanding, worked out fresh each month. A pound of extra principal paid off in month one is removed from every interest calculation for the rest of the term, potentially hundreds of them. The same pound paid off in the second-to-last month only avoids one month of interest, since almost nothing is left to charge interest on by then. This is why a lump sum or a new overpayment habit started today is worth noticeably more, in interest avoided, than the same amount applied a decade into the mortgage. The milestone table below shows a related effect: £50 a month cuts 1 year 11 months and saves £13,414.52, while ten times that amount, £500 a month, cuts 11 years 1 month and saves £73,102.18, only a little over five times as much rather than ten, because a bigger overpayment clears the balance faster, leaving fewer expensive early months for the next pound to work against.

Overpayment allowances and early repayment charges

Many fixed-rate mortgages cap how much can be overpaid in a year before a fee applies, commonly an annual overpayment allowance of around 10% of the outstanding balance, reset each year of the fixed deal. Overpaying beyond that allowance can trigger an early repayment charge on the excess. Standard variable rate and tracker mortgages typically carry no such restriction. The figure sits in the mortgage offer itself and varies by lender and product, so this calculator treats it as a check rather than a rule: whenever the extra payments entered would exceed a rough 10% allowance in the first year, a note above recommends checking the actual offer, or asking the lender, before committing to that level of overpayment.

Overpaying against investing the same money instead

Overpaying a mortgage produces a guaranteed return equal to the mortgage rate, since every pound of principal removed early stops being charged interest at that rate for good. Investing the same money instead has no guaranteed outcome: returns depend on markets, timing and how long the money stays invested, and can come in below the mortgage rate as easily as above it. Neither choice is automatically right. A mortgage rate above what a cautious saver could otherwise earn tends to favour overpaying, on a guaranteed-versus-uncertain basis alone; a low rate leaves more room for investing to win out over time, at the cost of accepting real risk. This calculator only measures what overpaying would save on the mortgage itself; it has no opinion on where else the money could go, and nothing here is investment advice.

Before either option, cheaper priorities usually come first: a cash buffer for genuine emergencies, since money paid into a mortgage is not easy to pull back out quickly, and any higher-rate debt such as credit cards, which almost always costs more than a typical mortgage and so is worth clearing first.

A note on offset mortgages

An offset mortgage links the balance to a savings account, charging interest only on the difference between the two, so a £200,000 mortgage with £20,000 in the linked savings pot is charged interest as if it were £180,000, without a formal overpayment ever being made. It reaches much the same outcome as overpaying while keeping the cash accessible, though offset deals often carry a higher rate than an equivalent standard mortgage. It is not modelled on this page; the saving depends on a savings balance moving over time rather than a fixed extra payment, and would need its own calculator.

Reading the results on this page

The headline states the months and interest saved for whichever mix of the three levers is set, alongside both payoff dates. The chart plots the balance falling to zero under both plans, so it is obvious at a glance how much sooner the accelerated line finishes. The milestone table holds everything else fixed and only changes the extra monthly amount, across four common levels, so it reads on its own regardless of what the levers above are set to. The final table adds up total interest and total money paid over the life of each plan, since a shorter term paid off faster and a longer one paid off slower are both valid ways to look at the same numbers.

Questions people ask

This calculator gives an estimate for a standard fixed-rate repayment mortgage and is not financial or lending advice. Real overpayment rules, fees and interest calculations depend on the exact mortgage agreement. Check your mortgage offer or ask your lender before changing how much you pay.