Mortgage overpayments
Overpaying a mortgage is one of the most common ways of paying back your mortgage early.
How to overpay your mortgage
First, you need to check with your lender that they allow overpayments. Some may charge a fee to pay more than your agreed monthly amount. These penalties could cost more than any savings made through overpaying your mortgage, so it’s important to check.
If you want to overpay and your provider allows it, you can overpay via:
- Standing order
- Bank transfer
- Direct debit
- Payment in a branch or by phoning your mortgage provider
If you’re interested in overpaying on your mortgage, try our mortgage overpayment calculator. Here you can get an estimate of how overpayments work.
How fast can you pay your mortgage off?
The speed you can pay off your mortgage will depend on a few factors:
- Your mortgage amount
- Mortgage term
- Interest rate
- Limits on overpayment
Usually, with a standard variable rate (SVR), you can overpay by as much as you want to pay off your mortgage faster.
Many mortgages change to SVR after your mortgage term ends. Check with your providers about which rate you are on and if there’s any limits on overpayment.
Early repayment charge
If you overpay more than the limit set by your lender or pay off your mortgage early, you may have to pay an early repayment charge (ERC). This amount will vary depending on the lender.
It’s usually equal to several months of the mortgage’s interest, a percentage of the original mortgage value or balance still owed. Check with your provider before you make any mortgage overpayments.
If you’re a Lloyds Bank customer, have a look at our terms around mortgage overpayments.
