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How to pay off your mortgage early

Couple happy to have paid off their mortgage.

Who is this page for?

This page is for first time buyers looking ahead, or homeowners who want to know how to pay their mortgage off early. Existing customers can find mortgage payment information on our manage your mortgage page.

How to pay off your mortgage early

Paying your mortgage off completely is the goal for most homeowners. Doing so could save you money by:

  • Saving on interest payments
  • Reducing your monthly outgoings

There are lots of ways to reach this milestone earlier – such as paying a lump sum or overpaying on your monthly repayments.

Ways to pay off your mortgage early

If you’re in a good financial position and want to start paying off your mortgage early, there are a few ways this can be done:

  • Increasing monthly payments – If your salary increases, you may want to pay more towards your mortgage. Check with your lender to see if you can increase the amount you pay each month. This is called an overpayment.
  • Lump sum – An overpayment can also be a one-off lump sum. Check your overpayment terms, as there may be a limit on how much you can overpay in a year.
  • Shorten your mortgage term – Generally, the shorter your mortgage term, the less interest you pay in total. This can mean higher monthly repayments, but you’ll pay less overall.

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.

The content on this page is for reference and does not constitute finance advice.

For impartial financial advice, we recommend government bodies like the Money Advice Service.

Calculators & tools

We have a range of mortgage calculators to help you:

  • Find out how much you could borrow from Lloyds Bank
  • See how much you could save if you make overpayments on your mortgage
  • Get an idea how a change to the Bank of England Base Rate could effect your monthly payments

Use our calculators and tools >

Need to speak with someone?

You can talk to us over the phone or use our mortgage video service from the comfort of your own home.

Contact us

Important legal information

Lloyds Bank plc. Registered office: 25 Gresham Street, London EC2V 7HN. Registered in England and Wales No. 2065. Lloyds Bank plc is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority under registration number 119278.

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