Regular Overpayment
One Off Overpayment
Understanding Amortisation
What is Amortisation?
Amortisation is the process of paying off a mortgage through regular payments. Each payment covers both interest and principal, with the balance shifting over time.
Early Payments
In the early years, most of your payment goes toward interest. As the principal decreases, more goes toward reducing the balance.
Overpayment Benefits
Making overpayments reduces your principal faster, saving significant interest over the life of the loan and potentially clearing your mortgage years earlier.
Regular vs One-Off
Regular overpayments build discipline and compound savings. One-off overpayments are useful for windfalls like bonuses or inheritance.
Rate Changes
If you have a fixed-rate period followed by a reversionary rate, the calculator shows how your payments will change when the rate adjusts.
Payment Frequency
Weekly or fortnightly payments can save interest compared to monthly payments, as you make more frequent principal reductions throughout the year.
Visual Analysis
The graph shows your balance declining over time. With overpayments, you'll see a steeper decline and earlier mortgage freedom.
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