Paying a little extra each month, or making a one-off lump sum on your mortgage, can save you thousands in interest and clear the loan years early. This mortgage overpayment calculator simulates the amortisation month by month, with and without your extra payments, and shows how much interest you save, how much time you gain and your new remaining term.

What mortgage overpayment is

Overpaying (or early repayment) means giving the bank back, before the due date, part (partial) or all (full) of the capital still owed. Every extra euro reduces the outstanding balance: since interest is charged precisely on the capital still to be repaid, lowering it early reduces all future interest. It is one of the most effective ways to save on a mortgage.

How the calculator works

Enter the outstanding balance (how much you still owe), the annual rate, the remaining years and your extra payments: an additional monthly amount and/or a one-off lump sum to pay now. The tool reconstructs your current payment and simulates two amortisation scenarios: without and with the extra payments. You get the total interest in both cases, the interest saved, the time saved and the new term.

Why paying early saves interest

In a fixed-instalment mortgage (standard amortisation) each payment is part interest and part capital. At the start you pay mostly interest; only over time does the capital share grow. Paying extra directly cuts the outstanding balance, so all the interest that would have been charged on that capital disappears. That is why overpayment is more worthwhile the earlier you do it and the higher the rate.

One-off lump sum or extra monthly payment?

Both routes reduce the capital, with different effects:

For the same amount, a sum paid today saves more interest than small payments spread over the years, because it acts on the capital sooner. The calculator lets you compare both levers.

How much you save: examples compared

On a €150,000 mortgage at 3.5% with 20 years left (payment about €870/month), here is the saving with different extra monthly payments:

Indicative figures: change the inputs in the calculator for your exact situation.

Cut the term or cut the payment?

With a partial repayment the bank often offers two options: keep the same payment and shorten the term, or keep the term and lower the payment. To save the most interest it is almost always better to shorten the term (this is what the calculator simulates with the extra payment). Lowering the payment instead frees up monthly budget, useful if you need more breathing room.

Penalties and costs of early repayment

Before paying, check the contract. In many countries first-home mortgages taken out by individuals in recent years carry no early-repayment penalty (in Italy for first-home loans after 2007). For other mortgage types or in other countries there may be a fee, usually a small percentage of the capital repaid. Always include any cost in the comparison.

Should you repay the mortgage or invest the cash?

This is the key question when you have money set aside. The rule of thumb: repaying is worthwhile if the mortgage rate is higher than the safe, net return you would get by investing. Repaying offers a certain "return" equal to the mortgage rate, with no risk and no tax. Investing may yield more but with risk and uncertainty. With high mortgage rates, repayment is often the rational choice; with very low rates investing may be better.

When NOT to overpay early

• If it would drain your emergency fund: keep cash for the unexpected.
• If you have more expensive debt (personal loans, cards): clear that first, it costs more than the mortgage.
• If the mortgage rate is very low and you can get a higher net return with a safe investment.
• If there are high penalties that wipe out the interest saving.

Common mistakes to avoid

• Repaying by emptying all your savings, leaving no buffer for emergencies.
• Not checking the contract penalties before paying.
• Choosing to lower the payment when the goal is to save interest (better to shorten the term).
• Delaying: the sooner you pay, the more interest you save, because the capital stays high for longer.

Practical example

A €150,000 mortgage at 3.5% with 20 years left: the payment is about €870/month and you would pay about €58,800 in interest. Paying €5,000 as a lump sum now and adding €100 to each instalment, interest drops to about €45,700: you save over €13,000 and clear the mortgage almost three and a half years early (16 years 5 months instead of 20). Enter your own numbers for the exact simulation.

Updated July 2026