How mortgage overpayments work
Last reviewed 14 July 2026 · Smarter Mortgage Quotes editorial team
Overpaying your mortgage is one of the cleanest financial wins available — but only if the maths beats your savings rate and your lender lets you do it.
The 10% rule
Most UK lenders let you overpay up to 10% of the outstanding balance per calendar year during your fixed period without triggering an ERC. After the fix ends, most lenders allow unlimited overpayment.
Reduce term vs reduce balance
Lenders default to applying overpayments to “reduce balance” — your monthly payment shrinks slightly, but the term stays the same. To accelerate payoff, ask the lender to apply overpayments to “reduce term”.
Should you overpay or save?
Compare your mortgage rate to the after-tax interest on the same money in savings. With 4.5%+ mortgage rates, overpaying usually wins. Keep a 3-6 month emergency buffer first.
Worked example
£180,000 mortgage, 22 years left, 5.10% rate. £200/month overpayment saves ~£24,000 in interest and pays off the mortgage ~5.5 years earlier.
Try the overpayment calculator or speak to an adviser to see how overpayments fit into your mortgage strategy.