Becoming mortgage free can often be a long-term commitment, with the standard mortgage repayment term usually at 25 years or more. While some will be satisfied to spread their repayments over a longer period of time, others would like to reach homeownership sooner rather than later. And an action which is often seen as a good way to reach mortgage free status is overpayment.

Overpayment quite literally involves contributing more to a mortgage than the terms of an arrangement stipulate.

This could be a good solution for someone who has earned a bonus or commission, come into some money, or wants to eliminate a mortgage to save towards other goals such as retirement or holidays. 

There are, of course, also some benefits to overpaying a mortgage which are worth noting.

Most importantly for those chasing the goal of homeownership, overpayments allow Britons to reduce their mortgage balance so it can potentially be paid off sooner.

Furthermore, when savings rates are low, the amount saved on the mortgage interest could be a lot more than otherwise earned in savings interest. 

READ MORE: Mortgage free: Homeowner reveals how they paid off mortgage at 47

Overpaying can also reduce the loan to value, so when it comes to remortgaging, the products available could be cheaper. 

However, overpayment is not an option which is available to everyone.

Only certain lenders will allow overpayments, and even those who do will have set rules on how much extra can be paid.

Fortunately, Defaqto, the independent financial information business, has provided Britons with more advice on the matter.

Speaking to Express.co.uk, Katie Brain, Insight Analyst at Defaqto, offered further insight into the arrangements which could work well.

Ms Brain analysed the top 10 lenders based on current fixed rate products to see which providers offered overpayments.

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The first was Barclays which offers capital repayments of up to 10 percent per annum without penalty.

However, this can vary depending on the product, so Barclays’ customers should check their individual arrangement.

Similar arrangements are also offered by the NatWest Group and Virgin Money who also allow 10 percent overpayments each year. 

Next is Coventry Building Society which offers 10 percent capital repayments each year without penalty.

HSBC offers overpayments of 10 percent of the outstanding balance of a mortgage which is calculated on each anniversary of the start of a fixed rate period.

Whereas Nationwide offers overpayments of up to 10 percent of the original loan without penalty per annum.

At Yorkshire Building Society, overpayments are available without penalty up to 10 percent in any 12 month period, with similar arrangements also available at Lloyds Banking Group and TSB. 

And finally, Santander mortgages allow overpayments of up to 10% each calendar year of the outstanding mortgage balance as of 1st January without incurring an early repayment charge.

There are, however, a number of providers who allow unlimited overpayments for fixed rate products.

At Accord and Chelsea Building Society, offset products unlimited overpayments are allowed without penalty.

At Leeds Building Society, Flexit product unlimited overpayments are allowed without penalty, and at Yorkshire Building Society unlimited payments without penalty are available on offset products.

Finally, at First Direct, all products unlimited lump sum repayments and overpayments are permitted without charge. 

However, an early repayment charge does apply upon full redemption only. 

It is worth noting however that this data applies to new mortgage products, and so existing customers may have a different arrangement.

As such, Ms Brain urges customers to check their mortgage offer or approach their lender directly to avoid any potential charges associated with overpayments. 

And if the customer wants an overpayment to reduce their term, to get closer to being mortgage free, they may need to contact their provider to make the relevant adjustments. 



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