Should I overpay my mortgage?
Overpaying reduces the balance your interest is charged on, so you pay less interest and can clear the mortgage sooner.
Overpaying reduces the balance your interest is charged on, so you pay less interest and can clear the mortgage sooner.
Whether it suits you depends on your other debts, your pension, your savings and your lender's overpayment allowance.
The adviser for this subject: Mike Chan
After an overpayment some lenders reduce your monthly payment and keep the term, and others keep the payment and shorten the term. Ask your lender which it does and whether you can choose.
Check your lender's overpayment allowance first. Paying more than it allows can bring an early repayment charge.
It depends on your lender and your deal. Check the allowance in your mortgage offer or ask the lender before you pay.
Overpaying saves a known rate of interest. Investing can return more or less than that, and the value can fall. Which suits you depends on your timescale and how much risk you can take.
On a flexible or offset mortgage you may be able to draw it back. Ask your lender whether your deal allows it, and keep an emergency fund before you overpay.
A lower balance reduces the loan-to-value, which can affect the deals available. Stay within your current allowance so an early repayment charge does not apply. When should I remortgage?
Paying off part of a mortgage reduces your cash and your debt by the same amount, so the value of your estate is unchanged on the day you pay. Giving money away covers the ways to reduce inheritance tax.
Bring your mortgage offer and your pension statements, and we can look at where spare money goes furthest for you.
Mortgage Adviser
Your first call is with an Account Manager and is at no cost to you. Tell us what is on your mind: a pension you have lost track of, a fixed rate ending, a will you keep meaning to write.