Making overpayments

Making overpayments can be a great way to improve your financial position. Each overpayment reduces your mortgage balance and therefore the interest you are charged over the term of your mortgage. Even small overpayments can add up and make a big difference to the total amount of interest that you will pay.

If you can't afford to make regular monthly overpayments, you can always just do this as and when you want to. For example in those situations when you might find yourself with surplus cash, an extra bonus or some spare savings.

See the effect on your mortgage

Use our Overpayments calculator to illustrate the positive effect making overpayments can have on your mortgage.  Simply enter your mortgage type, the outstanding balance, current interest rate, remaining term and the amount you think you can afford to overpay. Whether it’s monthly or a one off payment, you might be surprised how much difference it makes.

Please note – the calculator assumes your current interest rate will remain the same over the remaining term of your mortgage. In reality, interest rates could rise and fall and this will affect the amount you overpay.

To start making overpayments now, or for more information, please contact us.

Here are a range of Frequently Asked Questions about mortgage overpayments:

How does it work?

With our flexible mortgages you can make unlimited, penalty free overpayments in the form of a lump sum or a regular overpayment each month, provided that the mortgage is not redeemed in full.

Depending on your mortgage, you may be liable to pay an Early Repayment Charge (ERC) if you make an overpayment. However, we are currently waiving all ERCs until further notice, so you won't have to pay this fee at present, even if it would usually have applied.

Are overpayments suitable for everyone?

Overpayments cannot be made by Lifetime mortgage customers.

How much should I overpay?

While there are clear financial benefits to overpaying your mortgage, you should not overpay more than you can afford. If you have other outstanding debts, like credit cards or personal loans, consider if it would be better paying these off first – especially if the interest you are being charged on them is higher than your mortgage. If you have any queries, we recommend you speak to an independent financial advisor.