Every calculator makes assumptions. We think users deserve to know exactly what ours are, so here's the full list, categorised by how material each one is to your decision.
We assume interest is calculated on the balance at the start of each month. This matches how the vast majority of UK mortgages work, but a few (especially older tracker products) use daily interest calculations. The difference is usually under £100 over the life of a typical mortgage.
We apply overpayments to the capital balance at the end of each month, after interest for that month has been charged. Some lenders apply overpayments immediately on receipt, giving you an extra day or two of interest saving. Over 25 years this adds up to ~£50–£100.
We track overpayments against a 10% cap reset annually on the anniversary of the mortgage start date. Some lenders use calendar years, some use tax years, a few use rolling 12-month windows. If your specific lender uses one of these alternatives, the ERC timing in our calculator will be close but not exact.
We assume the current Personal Savings Allowance, ISA allowance, LISA bonus, pension annual allowance and tax bands stay unchanged for the full term modelled. This is almost certainly wrong for any term over 5 years, but it's the only practical approach.
In the S&S ISA and pension calculators, we use a constant annual return. Real markets don't work like that. A 5% average return includes years of -25% and years of +35%. Sequence of returns matters, a bad run early in your investing life is far worse than the same run late.
We treat every month as 1/12 of a year. UK mortgages sometimes use daily interest with variable month lengths, producing small differences.
We assume overpayments are free. Almost all UK lenders offer free overpayments, but a handful of specialist products charge a small admin fee (£25 or so) for lump sums. Check your mortgage offer.
We only recalculate the contractual payment when the user explicitly triggers a rate change or selects "lower the payment" behaviour. In reality, your lender may recalculate the payment at other points (annual review, end-of-fix) depending on the product.
We treat month 1 as fully interest-bearing. Real mortgages have a slightly different first-month interest charge depending on the completion date. The difference is pennies.
This calculator is for planning, not advice. Before making a large overpayment, remortgaging mid-fix, or switching to an offset, speak to a regulated mortgage broker. The FCA's consumer mortgage guide explains what to ask for and what to expect.
Information on this site is general guidance only. We don't know your specific circumstances, tax position, or future plans. Always take regulated advice for significant financial decisions.
If you want to dig into the maths itself, see how we calculate.