How to calculate if its worth paying mortgage off

I have a fixed rate mortgage until 31 Jul 2022.
I can make a yearly overpayment of 10% with no charge. I intend to do this first thing in the new year.
As it stands, the early repayment charge is 2%, which then reduces to 1% in August 2021.
Is there a way to calculate - if I didnt pay the mortgage back early - what my interest payments would be for the remaining 2 years? (The mortgage is calculated daily and reduces by the balance.)
Basically, I want to weigh-up whether its worth paying the mortgage off immediately, or in August 2021, or until it naturally matures.
Thanks :)


  • The key question is whether the rate on your mortgage is more or less than you're getting on your savings and then what additional impact the ERC has on the comparison.
  • vertex
    vertex Posts: 181
    First Anniversary Name Dropper First Post Combo Breaker
    edited 16 December 2020 at 8:00AM

    My mortgage rate is 2.09%. My savings rate is 0.5%. I could put the money in a S&S ISA (probably a Vanguard passive tracker fund) and perhaps hopefully get a better rate on return than 2.09% (+ ERC).

    Eitherway, it would be good  to know what the interest amount I would pay on the remainding amount over the next 2 years would be. (My maths is awful!) Perhaps theres a calculation or a calculator? I cant get my head around how to work out the interest paid on the monthly-diminishing capital amount.
  • If you type 'mortgage calculator' into Google, you'll find thousands. You can then also see the impact of changing balance, rate and term.
  • EimearF
    EimearF Posts: 203
    First Anniversary First Post Name Dropper
    I’m trying to do similar calculation. The best I’ve found is mse ditch your fix calculator on this page: 
    Working it out on the basis that as long as the competitive rate is over zero then it’s worth the hit. I’m try to find a way of working out if I deduct my 10% allowance if it is worth too. I may just save until I can lump sum clear the whole thing just making the 10% overpayment. It’s hard to get a calculator to accurately answer the question though 
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