Should you overpay your mortgage?
Not sure if you should overpay on your mortgage or not? Here's what you need to know.
Last updated on
May 23, 2022 13:40
The short answer: yes, if you can.
When you get a mortgage, you agree a minimum amount to pay back your lender each month. Overpaying just means paying more than that, either regularly each month or as a lump sum. It’s something you can usually arrange by getting in touch with your lender.
Overpaying even can make you mortgage-free faster, wiping more of the debt you have to pay and the interest you would have paid on it. Make sure you tell your lender that the reason you’re overpaying is to reduce your mortgage term otherwise they might keep your term the same, and use your overpayment to reduce your monthly payments.
Because the lender makes most of their money from the interest you pay, they only let you overpay by a certain amount before they charge you a fee, usually a maximum of 10% of your remaining mortgage debt. Talk to your lender about the rules and to work out what you can do.
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