Mortgage Overpayment Calculator
This calculator shows how much you can save by adding extra money to your mortgage payment each month. You can choose three strategies: keep your payment the same and finish earlier, keep the timeline but lower future payments, or use the snowball method — you pay and save the same each month as when shortening the term, but the installment the bank requires is lower. It is designed for homeowners who want to see exactly how early repayments affect their loan balance, interest costs, and payoff date.
Updated:
Defaults to the NBP reference rate (3.75%, in effect from March 5, 2026) + 2 percentage points — roughly what a variable-rate mortgage costs today (WIBOR + the bank's margin). Enter the rate from your contract.
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📗 Scenario B
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Balance over time
| Month | Installment | Principal | Interest | Overpayment | Balance |
|---|
Example: what does a PLN 500 monthly overpayment save?
A PLN 400,000 loan over 20 years at 5.75% with equal installments of PLN 2,808. Without overpayments, total interest comes to PLN 274,001. Here is the same loan with PLN 500 overpaid every month:
| Strategy | Total interest | Interest saved | Installments |
|---|---|---|---|
| Without overpayment | PLN 274,001 | — | 240 |
| Shorten period | PLN 199,309 | PLN 74,692 | 182 |
| Reduce installment | PLN 235,047 | PLN 38,954 | 238 |
| Snowball | PLN 199,309 | PLN 74,692 | 182 |
Overpaying PLN 500 a month, you repay the loan 4 years and 10 months sooner and pay PLN 74,692 less interest (the “shorten period” strategy).
These numbers come from the same calculator you see above, using its default inputs. Enter your own to see your result.
How we calculate
For equal (annuity) installments we use R = K × r × (1 + r)ⁿ / ((1 + r)ⁿ − 1), where K is the loan amount, r the monthly interest rate (annual rate ÷ 12) and n the number of installments.
Each month, interest is charged on the remaining principal (balance × r). The rest of the installment repays principal, and an overpayment reduces principal in full — so every overpayment lowers the interest in all the following months.
With “shorten period” the installment stays the same and the number of installments drops. With “reduce installment” the installment is recalculated over the remaining term after each overpayment. “Snowball” also recalculates the installment, but adds the difference between the old and new installment to the next overpayment, so your monthly outlay stays constant.
Assumptions: a fixed interest rate for the whole term (variable rates, e.g. based on WIBOR, change in practice), equal installments, a monthly overpayment, no fees or insurance. Treat the result as an estimate — your bank will give you the exact schedule.
Frequently Asked Questions
What is mortgage overpayment?
Mortgage overpayment means paying more than your required monthly installment. This reduces your outstanding principal faster, which either shortens the total loan term or lowers your future monthly payments. Because interest is calculated on the remaining balance, overpaying early in the loan saves the most money over time.
Is it better to shorten the loan period or reduce the monthly installment?
It depends on your financial priorities. Shortening the period gets you debt-free sooner and saves the most in total interest. Reducing the installment gives immediate monthly budget relief, which helps if you want more cash flow. The snowball method combines both: you save as much as by shortening the term, while the installment the bank requires is lower.
What is the snowball overpayment method?
In this strategy your installment is recalculated over the remaining term after each overpayment, and the difference between the old and new installment is added to your next overpayment, so installment plus overpayment stays the same every month. In this model that repays the loan exactly like shortening the term: the same monthly outlay, the same interest saved and the same payoff date. The difference is that the installment the bank requires is lower, so in a tight month you can overpay less.
How much can I save by overpaying my mortgage?
Savings depend on your loan amount, interest rate, term, and monthly overpayment. For example, on a PLN 400,000 loan over 20 years at 5.75% interest, overpaying PLN 500 a month cuts 4 years and 10 months off the repayment and lowers total interest by PLN 74,692. Use the calculator above for precise numbers for your loan.
How often can I overpay my mortgage?
Most banks in Poland let you overpay at any time, usually through online banking. For variable-rate mortgages, the Polish Mortgage Credit Act allows a prepayment fee only during the first 3 years of the agreement and capped at 3% of the amount repaid. During a fixed-rate period the bank may claim compensation for its costs. Check your loan agreement for the details.
Guides
Overpaying a mortgage: shorten the term or lower the installment?
Overpaying your mortgage? We compare a shorter term, a lower installment and the snowball method: the interest each saves and when to choose which.
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Overpaying a mortgage 'earns' its interest rate. We show with numbers when investing, an emergency fund or paying off other debt makes more sense.
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Buying or renting? Why 'rent is money down the drain' is a myth, what really decides the result and how to compare both on your own numbers.
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