How Much Can £100 a Month Save on Your Mortgage?

Summary

This article explains how regular mortgage overpayments could affect interest costs and mortgage term length for UK homeowners. Examples are illustrative only and do not constitute financial advice.

£100 a month doesn’t feel like much — but when it comes to your mortgage, it can make a surprisingly large difference.

Many UK homeowners are shocked by how powerful small, consistent overpayments can be over the long term, even when starting with modest amounts.

Why small overpayments have a big impact

Mortgage interest is calculated daily or monthly on your remaining balance. When you overpay:

• Your balance falls faster

• You’re charged less interest

• More of each payment goes toward reducing the loan, not paying the lender

This creates a compounding effect over time, where early reductions in your balance continue to generate savings year after year.

This is why even relatively small overpayments can deliver outsized benefits.

A simple UK example

Let’s say you have:

• A £200,000 mortgage

• A 25-year remaining term

• An interest rate of 4.5%

Overpaying by £100 a month could:

• Save you tens of thousands of pounds in interest

• Shorten your mortgage by several years

The exact figures depend on your rate and remaining term — but the principle is consistent across most UK repayment mortgages.

You can see this effect clearly using our

👉 free mortgage overpayment calculator.

Does £100 a month reduce your payments or your term?

For most UK mortgages, overpayments reduce the mortgage term by default, not the monthly payment.

That means:

• Your monthly payment usually stays the same

• You become mortgage-free sooner

• You pay less interest overall

We explain how this works — and when payments can reduce instead — in

Does overpaying a mortgage reduce your monthly payments or term?.

Is £100 a month affordable?

For many households, £100 a month is:

• Less than the cost of a few takeaways

• Less than some subscription services

• Manageable when reviewed alongside other spending

The key is ensuring overpayments are comfortable and sustainable, not a financial strain. Overpaying a little for many years is far more effective than overpaying aggressively and stopping.

What about mortgage overpayment limits?

Most UK lenders allow penalty-free overpayments of up to 10% of your outstanding balance each year during fixed or discounted periods.

£100 a month (or £1,200 per year) usually falls well within this limit, but it’s still important to understand your lender’s rules.

We explain how allowances work in detail in

What is the UK mortgage overpayment cap?.

Monthly overpayments vs lump sums

£100 a month is a great starting point — but many homeowners also use lump sums when they can.

For example:

• Regular £100 monthly overpayments

• Plus occasional bonuses or refunds

Both count toward your annual allowance.

We compare these approaches in

Lump sum vs monthly mortgage overpayments – which saves more?.

Should you overpay or save instead?

In some situations — particularly when savings rates are competitive — keeping money in savings instead of overpaying can make sense.

This depends on:

• Your mortgage rate

• Your need for flexibility

• Your wider financial goals

We explore this trade-off in

Mortgage overpayments vs savings accounts.

Can you overpay £100 a month on a fixed rate mortgage?

In most cases, yes — but rules apply.

Most fixed rate mortgages allow overpayments within your annual allowance, but exceeding it can trigger early repayment charges.

We cover this fully in

Can you overpay a mortgage during a fixed rate period?.

Can you increase overpayments later?

Absolutely. Many homeowners:

• Start with £100 a month

• Increase overpayments after pay rises

• Add lump sums later on

You don’t need to overpay aggressively from day one. Consistency matters far more than speed.

For longer-term planning — including how overpayments affect remortgaging and rate changes — the

Advanced Mortgage Planner preview lets you model different scenarios over time.

Final thoughts

£100 a month may feel small, but when applied consistently, it can dramatically reduce both the interest you pay and the time it takes to clear your mortgage.

For many UK homeowners, it’s one of the simplest and most achievable steps toward becoming mortgage-free sooner.

👉 Try the free UK mortgage overpayment calculator to see exactly what £100 a month could save you on your own mortgage.