Mortgage Overpayment Calculator

How Do I Make an Overpayment on My Mortgage?

You’ll need to arrange overpaying a mortgage with your mortgage provider. You can either make an overpayment as a one-off lump sum or make regular (sometimes monthly) overpayments to reduce the outstanding mortgage balance. You'll also need to discuss with your mortgage lender whether you want an overpayment to shorten the term of your mortgage or reduce your monthly payments.

How to Set Up a Regular Overpayment

Most mortgage lenders will let you easily set up a regular mortgage overpayment amount. You can set the amount to pay off your mortgage, alongside your usual monthly payment. With many mortgage lenders, you'll be able to sort out your overpayment online. You can also talk to your mortgage lender in order to arrange a regular overpayment.

With some specific types of mortgage loans, you might have to contact your lender over the phone to arrange this. If you want to check whether your mortgage lender will let you set up regular overpayments this way, we can give you advice on what options you have.

How Long Will it Take Before a Mortgage Overpayment Is Applied?

Once you've sent an overpayment, it should not take long for it to appear on your mortgage balance. Most overpayments made during banking hours should show up within a few hours. On weekends or bank holidays, it could take a couple of days for your overpayment to show up.

You'll usually get a confirmation of your overpayment via email from your mortgage lender. After this, your new balance calculations should show the remainder of your loan, minus the additional payments.

Is It Better to Overpay My Mortgage Monthly or as a Lump Sum?

The best way to make overpayments depends on your circumstances and the details of your mortgage loan. If you find that you have additional funds to allocate towards your mortgage every month, it might be better for you to set up a regular monthly overpayment.

On the other hand, if you have a sudden windfall, a bonus, or another large source of funds that you want to pay towards your mortgage, you might find it easier to make a one-off payment. Either method will let you reduce your remaining loan amount and decrease the amount of interest you’ll pay overall.

You might also want to consider the different interest rates on your mortgage loan and savings account. If you get a higher interest rate for your savings, it might be better to put a lump sum into savings and then make regular overpayments on your mortgage. If, however, the interest rate on your mortgage is higher than you would get from savings, it might make more sense to pay off more of your mortgage as soon as possible.

Should You Overpay Your Mortgage?

Overpaying your mortgage can be a great way to lower your debt and save yourself money. Overpayments mean you can reduce the loan amount, letting you either lower your monthly payments or shorten your loan term. You can use our additional mortgage payment calculator to work out how much an overpayment will lower your overall loan charges. This can help you plan what to do with any bonuses or additional funds you might have access to in the future.

How Much Can You Overpay on a Fixed Rate Mortgage?

One of the most common questions that our brokers get is: "How much can I overpay on my mortgage?". Different lenders will allow different overpayment amounts. Typically, lenders allow overpayments of 10% of the remaining balance per year, without incurring penalties.

If you try to overpay more than your lender allows, you'll have to pay a fee. The fee is usually between 1% and 5% of the amount you pay. This might still be worthwhile for you if you want to lower your remaining amount, but it can limit how much you’ll benefit from an overpayment. If you need a mortgage with a higher overpayment allowance, you can get help from our expert brokers to find a mortgage lender that better suits your needs.

What Are the Benefits of Mortgage Overpay?

The main benefit of making an overpayment on your mortgage is that you'll lower your remaining balance and save yourself some money in the long term. Our overpayments calculator will show you how much you can save with different overpayments.

This can help you work out how much to put towards overpayments and the benefits. You can use the overpayments in 2 different ways. You can either lower your monthly payments, or you can shorten your mortgage term. There are also the options of making one lump sum payment or regular overpayments.

Important Things to Remember about Mortgage Overpayments

One of the most important things to remember about mortgage overpayments is that they can have a big cumulative effect on your mortgage. Even if your overpayment seems small at the time, it can help reduce the interest you pay in the long term and help you pay off your mortgage quicker, as demonstrated by using our mortgage overpay calculator. However, you should be aware of the terms of your loan, which may prevent overpayments.

To help you find a mortgage that lets your overpayments match your situation, get in touch today. Our brokers are experts and can help. You can also use our mortgage overpayment calculator to get an idea of what is possible.

Is It Better to Overpay My Mortgage Monthly or as a Lump Sum?

The best way to make overpayments depends on your circumstances and the details of your mortgage loan. If you find that you have additional funds to allocate towards your mortgage every month, it might be better for you to set up a regular monthly overpayment.

On the other hand, if you have a sudden windfall, a bonus, or another large source of funds that you want to pay towards your mortgage, you might find it easier to make a one-off payment. Either method will let you reduce your remaining loan amount and decrease the amount of interest you’ll pay overall.

You might also want to consider the different interest rates on your mortgage loan and savings account. If you get a higher interest rate for your savings, it might be better to put a lump sum into savings and then make regular overpayments on your mortgage. If, however, the interest rate on your mortgage is higher than you would get from savings, it might make more sense to pay off more of your mortgage as soon as possible.