Free calculator
Mortgage overpayment vs investing calculator
Compare putting spare money toward your mortgage against investing the same amount each month. Overpaying gives a guaranteed saving at your mortgage rate; investing an assumed return that isn't guaranteed. A what-if on the assumptions you set, not a recommendation of which to do.
Got a bit spare each month? This weighs up two options: paying extra off the mortgage (a guaranteed saving) versus investing the same money (which can go up or down). A what-if, not a verdict.
This calculator, the result and the breakdown are free for everyone, no account needed.
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How it works
- 1Enter the spare amount you could put toward the mortgage or investing each month.
- 2Enter your mortgage interest rate — the guaranteed return you get from overpaying — and how many years to compare over.
- 3Set the after-tax return you assume from investing instead. Returns aren't guaranteed, so this is an assumption you can change.
- 4The calculator compounds each path over the period and shows the illustrative value of each, and which comes out ahead on those assumptions.
Worked example
£300 a month spare, a 4.5% mortgage rate versus a 5% assumed after-tax investment return, compared over 10 years. The calculator compounds each path and shows the illustrative value of overpaying versus investing, and which is ahead on those assumptions.
Overpaying is guaranteed at your mortgage rate; the investment return isn't and can fall as well as rise. It ignores early-repayment charges, overpayment limits and tax on returns, so treat it as a picture to explore, not a verdict.
Frequently asked questions
Should I overpay my mortgage or invest?
It depends on your mortgage rate, the return you could earn investing, and how much certainty you want. Overpaying is a guaranteed saving; investing might do better or worse. The calculator compares both on your assumptions rather than picking one.
How much does overpaying my mortgage save?
Overpaying reduces the balance interest is charged on, so it saves interest at your mortgage rate — a guaranteed return. Enter your spare amount, rate and horizon and the calculator estimates the saving.
Why isn't the investing side guaranteed?
Investment returns vary year to year and can fall as well as rise, so the investing figure is an assumption you set, not a promise. Overpaying, by contrast, saves a known rate. The calculator shows both sides clearly.
What does the calculator leave out?
It's a money-only what-if. It doesn't model early-repayment charges, annual overpayment limits, tax on investment returns, or keeping cash accessible — all of which matter, so check your own mortgage terms and position.