Can You Overpay a Tracker or Variable Rate Mortgage in the UK?
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.
Usually yes, but the rules differ from lender to lender and from deal to deal. Some tracker and variable rate mortgages allow overpayments without limit or charge, while others have a yearly allowance and an early repayment charge above it. Check your mortgage offer before you pay a large amount.
Most of our overpayment guides focus on fixed rates. This guide covers the other common types. For fixed rates, see overpaying during a fixed rate period.
The main types of variable rate
- Tracker: follows a reference rate, often the Bank of England base rate, plus a set margin. Your rate moves when the reference rate moves.
- Standard variable rate (SVR): the lender’s own variable rate, which the lender can change. You may move onto it when a fixed or tracker deal ends, unless you choose a new deal.
- Discounted variable rate: a set amount below the lender’s standard variable rate for a period.
How overpayment rules can differ
- Some lenders allow overpayments on their standard variable rate without a charge or a yearly limit, and others apply the same kind of allowance as on a fixed rate.
- Some trackers, especially those with an introductory period, may carry early repayment charges and a yearly allowance, so a tracker is not automatically free to overpay.
- Discounted rates often have an early repayment charge for the discount period.
Whichever type you have, your mortgage offer and terms are the source. If they are unclear, ask your lender. Our guide to early repayment charges explains how a charge is usually worked out.
Overpaying when your fixed rate ends
When a fixed deal ends, you may be moved onto your lender’s standard variable rate unless you choose a new deal. Some lenders do not charge an early repayment charge at that point, but not all, so check your terms. Rates on a standard variable rate may be higher than on a new deal, so compare your options before you decide. Our guide to what happens to overpayments when you remortgage has more.
What a variable rate does to the numbers
A variable rate can change, so any estimate of how much overpaying could save can change too. The table below shows the same overpayment at three rates, as if each stayed the same. It is an illustration of the effect of the rate, not a forecast.
| Interest rate | Estimated interest saved | Estimated time saved |
|---|---|---|
| 3% | about £21,623 | about 5 years 11 months |
| 4.5% | about £36,281 | about 6 years 1 month |
| 6% | about £54,079 | about 6 years 4 months |
Figures are estimates from this site’s calculator. They assume the rate stays the same for the whole term and ignore fees and early repayment charges. Try your own figures in the free mortgage overpayment calculator.
What to check before you overpay
- Whether your mortgage has an overpayment limit or an early repayment charge.
- When any charge stops, for example at the end of an introductory period.
- How your lender applies overpayments: to shorten the term or to lower your payment.
If you are unsure, consider speaking to a regulated mortgage adviser.
Questions people ask
Can I overpay a tracker mortgage?
Usually you can overpay, but the rules vary. Some trackers let you overpay freely, while others have a yearly allowance and an early repayment charge above it, especially trackers with an introductory period. Check your mortgage offer.
Can I overpay on a standard variable rate?
Some lenders allow overpayments on their standard variable rate without a charge, and others do not. Check your mortgage terms or ask your lender.
Does overpaying save more when rates are high?
Overpaying tends to reduce more interest when your rate is higher, other things being equal, and less when it is lower. A variable rate can change, so any estimate can change too.