Making overpayments

Making overpayments can be a great way to improve your financial position. Each overpayment reduces your mortgage balance and therefore the interest you are charged over the term of your mortgage. Even small overpayments can add up and make a big difference to the total amount of interest that you will pay.

If you can't afford to make regular monthly overpayments, you can always just do this as and when you want to. For example by using rental surplus, or spare cash following the sale of another property.

Please note: if you have a NRAM Commercial mortgage, please contact us, as additional costs or fees may apply.

See the effect on your mortgage

Use our Overpayments calculator to illustrate the positive effect making overpayments can have on your mortgage.  Simply enter your mortgage type, the outstanding balance, current interest rate, remaining term and the amount you think you can afford to overpay. Whether it’s monthly or a one off payment, you might be surprised how much difference it makes.

Please note – the calculator assumes your current interest rate will remain the same over the remaining term of your mortgage. In reality, interest rates could rise and fall and this will affect the amount you overpay.

To start making overpayments now, or for more information, please contact us.

Here are a range of Frequently Asked Questions about mortgage overpayments:

How does it work?

With our flexible mortgages you can make unlimited, penalty free overpayments in the form of a lump sum or a regular overpayment each month, provided that the mortgage is not redeemed in full.

Depending on your mortgage, you may be liable to pay an Early Repayment Charge (ERC) if you make an overpayment. However, we are currently waiving all ERCs until further notice, so you won't have to pay this fee at present, even if it would usually have applied.

Please note: if you have a NRAM Commercial mortgage, please contact us, as other costs or fees may apply.

Are there any tax implications?

Some landlords have told us that they are reluctant to pay money off their Buy to Let mortgage by switching to Repayment as it will mean paying extra tax.

However, you will only need to pay more tax if you are making larger profits and it’s also worth remembering that your portion of the profit will always be larger than the amount that you give to the tax man.

How much should I overpay?

While there are clear financial benefits to overpaying your mortgage, you should not overpay more than you can afford. If you have other outstanding debts, like credit cards or personal loans, consider if it would be better paying these off first – especially if the interest you are being charged on them is higher than your mortgage. If you have any queries, we recommend you speak to an independent financial advisor.