See the impact of dividing your extra monthly amount between overpaying your mortgage and investing — and compare against putting it all one way.
* All scenarios use the same total extra monthly amount. Once the mortgage is paid off early (in overpay scenarios), the freed-up payment is added to the investment pot for the remainder of the original term. Net wealth = investment pot minus any mortgage balance still outstanding. Contributions are assumed to be made at the start of each month and mortgage payments at the end, which is how the money actually moves. Investment returns are compounded monthly at the stated annual rate, on the same basis as the mortgage interest rate, so the two are directly comparable — if your expected return matches your mortgage rate, every split gives the same result. All three scenarios pay out the same total amount of cash over the same number of months and all end with the mortgage cleared, so their final net wealth figures are directly comparable. Investment growth is assumed to be free of UK tax, i.e. held in a Stocks and Shares ISA; outside an ISA, dividends and capital gains may be taxable and the figures shown would be lower. Contributions are assumed to remain within the annual ISA allowance — note that once the mortgage is cleared the amount being invested is much larger than the monthly extra. This calculator is for illustrative purposes only and does not constitute financial advice. Past investment performance is not a guide to future returns.