Mortgage overpayments refers to the process in which a borrower pays more than the minimal amount required by the lender. Borrowers can make the overpayment all in one go or they can set it up as a regular payment.
Making mortgage overpayments can be beneficial as it means that you can pay off your debt earlier and pay less on interest.
Deciding whether to make mortgage overpayments is a personal choice. However, you should consider the following benefits of making mortgage overpayments:
If you are within the fixed rate period, some mortgage providers may cap the amount you can overpay by 10%. Those who are not within the fixed rate period are unlikely to have a cap. You should also check whether your lender allows you to make overpayments that are penalty-free.
The information in this post is valid to the best of our knowledge on the date of posting. It is advised that you seek independent advice based on your individual circumstances.
T +44 (0)203 488 1488