Overpaying Your Mortgage by £500 a Month: What Could It Do?
This guide is for general information only and does not provide financial advice. Check your lender’s terms before overpaying, as early repayment charges may apply. Your home may be repossessed if you do not keep up repayments on your mortgage.
Overpaying by £500 a month is a larger commitment, and the effect depends on your balance, rate and when you start. This page shows estimates for five balances, then what changes if you start later.
That is £6,000 a year. Whether it fits your budget, and whether it stays within your lender’s yearly allowance (often a percentage of the balance, but lender-specific), are for you to check. See the UK mortgage overpayment cap.
What it could do, by balance
The table shows estimates for five balances at 4.5% with 25 years remaining. It assumes your lender keeps your payment the same, so the mortgage ends sooner, and that no fees or early repayment charges apply.
| Balance | Estimated result | Try it |
|---|---|---|
| £100,000 | about £42,981 of interest saved, 15 years 2 months sooner | Open in calculator |
| £150,000 | about £54,947 of interest saved, 12 years 9 months sooner | Open in calculator |
| £200,000 | about £63,888 of interest saved, 11 years sooner | Open in calculator |
| £250,000 | about £70,832 of interest saved, 9 years 8 months sooner | Open in calculator |
| £300,000 | about £76,386 of interest saved, 8 years 8 months sooner | Open in calculator |
Does when you start matter?
For a £200,000 balance at 4.5% with 25 years left, this table shows estimates if you start overpaying £500 a month now, or after a delay, and then keep going.
| Start | Estimated result |
|---|---|
| now | about £63,888 saved, 11 years sooner |
| after 2 years | about £53,868 saved, 9 years 11 months sooner |
| after 5 years | about £40,446 saved, 8 years 3 months sooner |
| after 10 years | about £22,410 saved, 5 years 9 months sooner |
Starting later reduces the estimated saving because the money has less time to reduce interest, other things being equal. Whether you can take overpaid money back depends on your mortgage, which is worth checking, and it is worth thinking about how much cash you want to keep available.
To see how the interest rate changes figures like these, read how your rate changes what overpaying does.
Figures are estimates from this site’s calculator. They assume a repayment mortgage, a rate that stays the same for the whole term and no fees or early repayment charges, and they are illustrations, not forecasts. Try your own figures in the free mortgage overpayment calculator.
If you are unsure whether overpaying suits you, consider speaking to a regulated mortgage adviser.
Questions people ask
Is £500 a month too much to overpay?
That depends on your budget and your lender’s allowance. £500 a month is £6,000 a year, which would be within an example 10% allowance on a balance of £60,000 or more, but allowances vary by lender. Check your mortgage offer, and think about how much cash you want to keep available.
Is it better to start overpaying now or later?
Other things being equal, starting earlier reduces more interest, as the table shows. But it depends on your finances, and whether overpaid money can be taken back depends on your mortgage.
Should I overpay £500 a month or save it?
It depends on your mortgage rate, your savings rate after tax and how much cash you need to keep. See overpaying versus savings accounts and should I overpay my mortgage?
Other worked examples
overpaying £200 a month, overpaying £300 a month, overpaying £1,000 a month, how your rate changes what overpaying does, how much to overpay to clear your mortgage sooner. For how much to overpay in general, see how much should I overpay?