Answers · UK 2025/26
Can I overpay my UK mortgage?
Most UK mortgages allow 10%/year overpayments without an early-repayment charge (ERC) during a fixed deal. Overpaying £100/month on a £200k 25-year mortgage at 4.5% saves ~£28,000 interest and clears the loan ~6 years early.
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UK mortgage overpayments 2025/26. Allowance: most fixed-rate UK mortgages let you overpay up to 10% of the outstanding balance per year without an Early Repayment Charge (ERC). After the fixed deal ends (on SVR/tracker), unlimited overpayments are usually allowed. ERC structure: typically 1-5% of the overpayment beyond the allowance, declining over the fixed period (e.g. 5% year 1, 4% year 2, etc). Strategy options. (1) Reduce term (lump-sum) — bank pays off principal, your remaining payments stay the same but the loan ends earlier. (2) Reduce payment — bank recalculates monthly payment lower for the rest of the term (less common, usually requires application). Maths: £200,000 at 4.5%/25 years = £1,112/month, total cost £333,571. Overpaying £100/month saves ~£28,000 interest, clears 6 years early. Overpaying a £5,000 lump sum: saves ~£14,000 interest over 25 years. Compare returns: overpaying = guaranteed return equal to your mortgage rate (currently 4-5%). ISA savings at 4.5% = similar guaranteed return but more flexible. Stocks & shares ISA = potentially higher but riskier. Most homeowners with higher mortgage rates (>4%) and no debt should overpay before saving.
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This answer is informational only and does not constitute financial, tax or legal advice. Figures are for the 2025/26 UK tax year. See our methodology and sources.