Early mortgage repayment calculator

Paying down a lump sum reduces what you owe by the same amount either way. The difference is what you do with that relief: lowering the payment keeps the same remaining time but costs less each month; shortening the term keeps the same monthly payment but finishes earlier. Both start from the same paid-down principal, which is why they can be compared directly.

Interest is calculated on the outstanding balance, so the sooner that balance comes down, the less interest accrues overall. Shortening the term keeps the payment high from the start, which pays down principal faster; lowering the payment instead spreads that relief across all the remaining time, so the balance takes longer to come down. The usual result is that shortening the term saves noticeably more total interest, even though you won't feel the difference in your account month to month.

Lowering the payment makes sense when you need to ease your monthly budget — for example, if your income has changed or you want more room for other expenses. It's not the option that saves the most over time, but it can be the most useful for your day-to-day finances.

We first calculate your current payment and interest from the outstanding balance, remaining term and interest rate. Then we subtract the amount you're paying down from that balance and recalculate: for the lower-payment scenario, keeping the same term; for the shorter-term scenario, keeping the same payment. The interest difference between each scenario and your current situation is the savings we show.