How to Overpay Your Mortgage in the UK: Step by Step

You overpay your mortgage by asking your lender to take an extra amount each month, or by making a one-off payment, on top of your normal payment. Before you start, check your lender’s annual overpayment allowance and how the overpayment will be applied, because going over the allowance can trigger an early repayment charge.

This guide is the practical procedure. For what happens to your mortgage once you overpay, see does overpaying reduce your monthly payments or term? To decide whether overpaying suits you, see should I overpay my mortgage?

Step 1: check your overpayment allowance and any charges

Most UK lenders limit how much you can overpay each year without charge while you are on a fixed or discounted rate. Ten per cent of the balance is common, but it varies by lender and by product, and it is often measured from your mortgage anniversary rather than the calendar year. Your mortgage offer and annual statement should say. If they do not, ask your lender. Our guide to the UK mortgage overpayment cap explains how the limit usually works.

Step 2: decide between a regular overpayment and a lump sum

A regular overpayment is an extra amount each month. It is easy to budget for and usually sits within the allowance. A lump sum is a one-off payment, for example from a bonus or savings. Both count towards the same yearly allowance. Our guide to lump sum versus monthly overpayments compares them.

Step 3: decide how your lender should apply it

Lenders differ. Many keep your monthly payment the same, so the mortgage ends sooner. Some lower your monthly payment instead, and some only do this if you ask. Ask which applies to you and whether you can choose. Reducing your term or lowering your payment shows the difference with worked figures.

Step 4: set it up

• Regular overpayment: use your lender’s overpayment facility if it has one, or a separate standing order. Set the amount and the date, and keep it within your allowance.
• Lump sum: pay online, by phone or at a branch, depending on your lender. Keep the confirmation.
• Label it: ask your lender to record it as an overpayment, not as an early payment of the next instalment.

Step 5: check your next statement

Look for three things: your balance fell by more than your normal payment would explain, your term or payment changed the way you expected, and no charge was applied. If something looks wrong, contact your lender straight away.

A worked example

This illustrative example uses a £200,000 balance, a 4.5% rate that stays the same, 25 years remaining and £200 a month overpaid, with no fees or early repayment charges. Overpaying £2,400 a year is well within a typical 10% allowance (£20,000 on this balance), but check yours.

If your lender keeps your payment the same, this example could save about £36,281 in interest and end the mortgage about 73 months (6 years 1 month) sooner. Figures are estimates from this site’s calculator. Try your own numbers in the free mortgage overpayment calculator.

Common mistakes to avoid

• Assuming the allowance is 10% for every lender and product.
• Paying a large lump sum without checking it against the yearly allowance.
• Forgetting that the allowance year usually starts at your mortgage anniversary.
• Not checking how the overpayment was applied on your next statement.

Questions people ask

Can I overpay my mortgage online?
Many lenders let you make a one-off overpayment online or through their app, and some let you set up a regular overpayment there too. Others ask you to phone, write or use a separate standing order, so check your lender’s website or your mortgage documents.

Do overpayments count as my monthly payment?
Not usually. An overpayment is normally an extra amount on top of your contractual payment. Ask your lender to record it as an overpayment, not as an early payment of a future instalment, and check your next statement to see how it was applied.

Can I stop overpaying if I need to?
In most cases yes. Overpaying is usually optional, so you can normally reduce or stop it, although a lender may need notice for a regular overpayment. Check how your lender handles this before you set one up.

Will overpaying affect my mortgage deal?
It can, if you go over your lender’s overpayment allowance during a fixed or discounted rate, because an early repayment charge may apply. Within the allowance, overpaying does not usually change your deal, but check your mortgage offer.

Sources and further reading

For general guidance on overpaying, see MoneyHelper, the free UK money guidance service. For the rules that apply to your own mortgage, use your lender’s documents. If you are unsure, speak to a regulated mortgage adviser before you decide.