Date:14 July 2008 I Comments: 1 I Views:54,386

A mortgage is a debt. There is no disputing the fact but it is a debt many people look at differently to credit cards, car loans and unsecured loans.

The reason for this is because of the size and timescale. 25 years is a long time to be paying off the debt and because of the size of the loan it wouldn’t be affordable for many people if it was over a shorter period.

Use this simple: > Mortgage Overpayment Calculator

An unsecured personal loan paid off over 3 years has the end in sight at the time of taking it out but who knows what life may bring over a 25 year period!

Homeowners will be paying off their mortgage for about 1/3 of their life and over half their working lives.

People who borrower over longer periods of time such as 30 or 35 years may even find themselves putting off retirement in the final years of their mortgage just to get it paid off.

But did you know, MOST mortgage lenders will let you pay off more each month than the repayment amount. Some have a fixed limit of £500 per month whereas many allow 10% of the outstanding balance each year (Flexible Mortgages and Offset Mortgages often have no restrictions on the amount you can overpay).


£200,000 Mortgage over 25 years @ 6% = £1289 per month (repayment basis)

Total interest paid = £186,581

Overpay by £100 per month and:

Monthly payment = £1289 + £100 = £1389

Mortgage is paid off in 21 years 4 months (3 years 8 months early).

Interest Saved by overpaying = £30,997

Overpay by £200 per month and:

Monthly payment = £1289 + £200 = £1489

Mortgage paid off in 18 years 8 months (6 years 4 months early).

Interest Saved by overpaying = £53,405

Surely if you can afford to overpay even a small amount the savings in interest make it well worthwhile.

Using this simple: > Mortgage Overpayment Calculator

Put in a few figures and just see the results.

A simple graph makes it easy to visualise.

Category: Mortgages


  1. Joe Downs

    Excellent points made in this blog. I personally feel that what’s going on in the UK is and will continue to foreshadow the lending guidelines in the US. Did I miss the RSS link? I’d like to continue to follow you…thanks again.