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  • Writer's pictureMatthew Pigrome

Why Making Overpayments on Your Mortgage Can Save You Money

As a homeowner, you may be considering making overpayments on your mortgage. While it may seem counterintuitive to pay more than your contractual repayment amount, overpaying can actually save you money in the long run. In this blog post, we'll explore the benefits of making overpayments on your mortgage instead of shortening the mortgage term.

  • Lower Interest Payments

By making overpayments on your mortgage, you can reduce the amount of interest you pay over the life of the loan. This is because the more you pay off your mortgage balance, the less interest you'll have to pay. Over time, this can save you thousands of pounds in interest payments.

  • Greater Flexibility

If you opt to shorten your mortgage term, you will be committed to making higher monthly repayments for a set period of time. This can be challenging if your financial circumstances change, such as a reduction in income or unexpected expenses. However, by making overpayments, you can enjoy greater flexibility in your mortgage repayments. You can choose to make overpayments when you have extra cash available, and revert back to your contractual repayment amount when necessary.

  • Maintain a Safety Net

Paying off your mortgage early by shortening the mortgage term means that you will have less cash available for emergencies or unexpected expenses. By making overpayments, you can maintain a safety net of savings while still reducing your mortgage balance. This can provide peace of mind and financial security.

  • Avoid Early Repayment Charges

If you choose to shorten your mortgage term, you may be subject to early repayment charges. These charges can be substantial and can offset the benefits of shortening your mortgage term. However, by making overpayments, you can reduce your mortgage balance without incurring any charges.


In conclusion, making overpayments on your mortgage can provide significant benefits over shortening the mortgage term. Not only can it lower your interest payments and provide greater flexibility, but it can also help you maintain a safety net of savings and avoid early repayment charges. Speak to your Mortgage321 advisor to see if making overpayments is the right option for you.

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