Definition
An overpayment can reduce future interest and shorten the effective term, but product allowances and ERCs vary. The lender may treat regular and lump-sum overpayments differently and may recalculate payments rather than the term.
Practical example
A lump sum within the product's penalty-free allowance reduces the balance on which later interest is calculated.
Why it matters
Keep an emergency buffer and compare overpaying with other debts, savings and pension priorities.
Mortgage overpayment calculatorSource and review
Reviewed 16 July 2026. Product criteria and rules can change.
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