How mortgage overpayments change the balance
Each repayment covers interest and reduces some principal. An overpayment reduces the principal earlier, so later interest is charged on a smaller balance. Enter the outstanding mortgage, remaining term and current rate, then compare monthly or one-off overpayments with the standard repayment schedule.
Worked example
On a £100,000 repayment mortgage over twenty years at a constant 5%, the standard monthly payment is about £660. At the start, one month’s interest is approximately £417, leaving about £243 to reduce the balance. An additional £100 payment reduces principal further; its full benefit depends on how long the lower balance remains outstanding.
Interpreting the result
Compare total interest and the estimated repayment date, not just the amount of the next payment. This model assumes its interest rate and payment treatment continue. Your lender may instead reduce future instalments, shorten the term, or recalculate payments at a product change.
Checks before relying on the numbers
Before overpaying, check your mortgage offer for annual limits, early repayment charges and how the lender applies extra payments. Keep money for emergencies and compare the cost of other debts. This is a repayment illustration, not a lender quotation; daily interest, fees and future rate changes can produce a different result.
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Personal Fortune · Updated 25 September 2026. Educational illustrations, not personal financial advice. Our approach and corrections.