Mortgage Overpay vs Save Calculator
Compare mortgage interest saved from overpayments against interest earned by saving the same amount. If your mortgage rate exceeds your savings rate, overpaying usually wins — but liquidity matters too.
Should you overpay your mortgage or put extra money into savings? This calculator compares both options side by side so you can see which comes out ahead under your assumptions.
This is an estimate, not financial advice. Your personal circumstances, tax position, mortgage terms, and access to funds all matter. Check your mortgage for any overpayment limits or early repayment charges.
More Save money calculators · All calculators · All guides
What this calculator does
This calculator compares two scenarios: (1) making monthly overpayments on your mortgage to reduce interest and term, and (2) saving the same monthly amount at a given interest rate. It shows the financial outcome of each option.
Who it is for
Homeowners with extra monthly income wondering whether to reduce their mortgage faster or build a savings pot. People comparing the effect of different interest rates on each option.
How to use it
Enter your mortgage balance, interest rate, and remaining term. Set the monthly amount you could overpay or save. Enter your savings interest rate and compounding frequency. Optionally set a comparison period. Click 'See My Result' for a side-by-side comparison.
How the calculation works
Mortgage: a standard amortisation schedule calculates total interest with and without overpayments. The difference is 'interest saved'. Savings: compound interest is applied at the chosen frequency over the comparison period. The calculator then compares mortgage interest saved against savings interest earned.
Worked example
£200,000 mortgage at 4.5% over 25 years. Overpaying £200/month: saves approximately £34,000 in interest and pays off 6 years early. Saving £200/month at 4% for 25 years: pot of approximately £103,000 (interest earned £43,000). In this scenario, saving earns more interest — but overpaying gives guaranteed savings regardless of market conditions.
Assumptions and limitations
- Mortgage uses standard repayment (capital + interest) amortisation
- Does not account for early repayment charges or overpayment limits
- Savings interest is calculated at the nominal rate with chosen compounding
- Does not account for tax on savings interest (PSA: basic-rate taxpayers get £1,000 tax-free, higher-rate £500)
- Mortgage rate is assumed fixed for the comparison period
- This is an estimate — not personal financial advice
Frequently asked questions
Is it better to overpay my mortgage or save?
It depends on your rates. If your mortgage rate is higher than your savings rate (after tax), overpaying usually saves more. But savings give you flexibility and access to your money in emergencies.
How much interest can mortgage overpayments save?
Significant amounts over time. For example, overpaying £200/month on a £200,000 mortgage at 4.5% could save over £30,000 in interest and shorten the term by 5-7 years.
When does saving beat overpaying a mortgage?
When your savings rate (after tax) exceeds your mortgage rate. For example, if your mortgage is 3.5% but you can earn 5% on savings, the maths favours saving — though there is no guarantee savings rates will stay high.
Related calculators
- Commute Cost Calculator — Your commute cost = fuel cost (based on distance, MPG, and fuel price) + parking + tolls, multiplied by commute days per week. Work-from-hom
- Electricity Cost Calculator — Electricity cost = (Wattage ÷ 1,000) × Hours used × Electricity rate per kWh. A 2,000W appliance running for 1 hour at 24.5p/kWh costs about
- Energy Bill Calculator — Your energy bill = (Usage in kWh × Unit rate) + Standing charges. The average UK household pays around £1,568/year for dual fuel under the c
- EV vs Petrol Cost Calculator — EV energy cost = miles ÷ miles/kWh × electricity rate. Petrol fuel cost = miles ÷ MPG × 4.546 × fuel price per litre. Compare annually to se
- Fuel Cost Calculator — Enter your journey distance and fuel economy to find out how much your trip will cost in fuel, with weekly, monthly, and annual estimates.
- Land Registry Fee Calculator — Use this Land Registry fee calculator to estimate the HM Land Registry registration fee for common property applications in England and Wale
Related guides
- Should I Overpay My Mortgage or Save? — When mortgage overpayments make sense, when saving is better, and how to compare the two options.
- How to Calculate Fuel Cost Per Journey — A simple guide to working out how much any car journey costs in fuel, with tips for reducing your fuel costs.
- How Savings Interest Works in the UK — Everything you need to know about savings interest rates, compound interest, AER, and the Personal Savings Allowance.
- How to Work Out Electricity Costs for Any Appliance — A simple guide to calculating how much any appliance costs to run, with common examples and money-saving tips.
- How to Estimate Your Energy Bill — Understand how energy bills are made up, what unit rates and standing charges mean, and how to estimate your monthly costs.
- EV vs Petrol Running Costs Compared — How much cheaper is an EV to run than a petrol car? A practical comparison of energy costs, maintenance, and cost per mile.
Sources and references
Bank of England base rate (https://www.bankofengland.co.uk/monetary-policy/the-interest-rate-bank-rate), Money Helper mortgage overpayment guide (https://www.moneyhelper.org.uk/en/homes/buying-a-home/should-i-overpay-my-mortgage)
Last updated
Last reviewed: 2026-04-12.