Compare Mortgage Overpayments and ISA Investment
The calculator models two parallel strategies over the same mortgage term and compares their outcomes.
Baseline repayment: Using the outstanding balance, annual interest rate, and remaining term, the standard monthly repayment required to clear the mortgage on schedule is calculated.
Scenario A - Mortgage Overpayment: The additional monthly budget is applied on top of the standard repayment, directly reducing the outstanding principal each month until the mortgage is cleared. The total months to clearance and total interest paid are recorded.
Scenario B - ISA Investment: The mortgage continues at the standard repayment while the additional budget is invested monthly, growing at the illustrative annual rate compounded monthly. The simulation runs until the investment pot equals or exceeds the outstanding balance. Months to crossover, total interest paid, and the final pot value are recorded.
Comparative assessment: The strategy that reaches its resolution first is identified. Both are then re-evaluated at that earlier month to produce a like-for-like net wealth comparison.
The results panel displays the quicker strategy, the months saved, the net wealth advantage of the dominant approach, and side-by-side breakdowns for each scenario covering time to completion, time saved, total interest paid, and, for the investment scenario, the accumulated pot value and growth above contributions.
Calculator Assumptions
Please refer to the Standard Calculator Assumptions panel displayed above the calculator for all statutory figures, default rates, and general notes that apply across the suite.
The following assumptions are specific to this calculator:
Monthly compounding: Both the mortgage interest charge and the investment return are applied monthly. This is standard for UK repayment mortgages but may differ from the individual's actual product terms.
Fixed rates throughout: The mortgage interest rate and illustrative investment return are held constant for the entire simulation.
Repayment mortgage only: A standard capital-and-interest repayment structure is assumed throughout.
No ISA tax treatment or allowance check: The investment pot grows at the gross illustrative rate. No tax is applied and no ISA subscription limit is validated.
No overpayment charges: The calculator assumes overpayments can be made without penalty. The individual should verify this with their lender.
Calculator Limitations
Estimates only: All figures are illustrative projections. Actual mortgage costs and investment returns will differ, and past investment performance is not a reliable indicator of future results.
Fixed rates only: Variable or tracker mortgage rates, product switches, and base-rate changes are not modelled.
Single consistent contribution: Irregular lump-sum overpayments, split strategies, or changes to the contribution amount over time are not supported.
Overpayment limits not checked: The calculator does not validate whether the overpayment amount exceeds any lender cap, nor does it apply early repayment charges.
Investment risk not reflected: Returns are modelled as a smooth constant rate. Real investment values fluctuate and can fall as well as rise.
Tax and allowance interactions not modelled: Tax on investment growth, dividend income, and interactions with other reliefs or benefits are outside the scope of this tool.
No personal advice: This tool is provided for illustrative purposes only and does not constitute financial, tax, or legal advice. Independent guidance from a qualified financial adviser or HMRC is recommended.
Privacy & Data Security
All calculations are executed locally within your browser. We do not track, store, or monitor the figures you enter into this tool.