This is a common question we get asked at Metro Finance and it’s such a beneficial thing if you can afford to make over-payments. Ultimately if you can make overpayments on your mortgage, you will bring the balance of your mortgage down decreasing either the monthly payments or the term of the mortgage. This will mean you pay less interest.
For example, if you have a mortgage of £200,000 over 30 years and you could afford to pay an extra £100 each month you could end up reducing your mortgage term by approx 5 years.
Similarly, if you had a mortgage of £100000 over 25 years and paid an additional £75 per month you could also end up reducing the term by approximately 5 years.
There are many factors involved in this, such as the mortgage interest rate you are on, so it’s something to discuss on an individual level with your mortgage advisor.
Many lenders allow overpayments of up to 10% per year of your mortgage balance but again check this with your advisor before you pay anything to make sure you don’t get any charges.