• Mortgage holders could save over £1,800 in interest alone through regular overpayments
  • 18% overpay on their mortgage every time a payment is due, however 58% never overpay
  • Over one in ten (11%) have delayed buying a new car in order to make extra monthly payments


26 July 2016 – UK mortgage holders could see significant savings and wipe years off their mortgage term by making regular overpayments. New research by comparethemarket.com finds that UK mortgage holders could save over £14bn over the next two decades by regularly overpaying.


Overpaying each month by as little as £59 – or around 10% of an average monthly payment – means mortgage holders could reduce their mortgage term by approximately one year and four months and possibly save £1,842 on interest alone. With nearly eight million mortgage holders in the UK, this equates to around £14.3 billion nationwide. For First Time Buyers the potential savings are even greater: mortgage holders between 25 and 34 years old could reduce their mortgage term by approximately 2 years and 8 months and save roughly £6,553 on interest by overpaying by 10%.


Average UK mortgage holder

25-34 year olds

Mortgage sum left to pay



Current interest rate



Remaining length of mortgage term (years)



Average monthly payment



Monthly overpayment of 10%



Savings on interest alone



Reduction in mortgage term

1 year, 4 months

2 years, 8 months


Many homeowners are already aware of the benefits of overpayment. In a poll conducted by comparethemarket.com of nearly 2,000 mortgage holders, 52% said that contributing more towards their mortgage each month would make them feel more financially secure, with 19% agreeing that it would make them feel much more secure. Those who do regularly contribute extra to their mortgage overpay by an average of 4.7%. Nearly a fifth (18%) said that they overpay every time a payment is due and 15% admitted to overpaying by more than 10% in the last twelve months.


Many mortgage holders are willing to give up day to day luxuries in order to afford overpayments. To pay off more of their mortgage, over one in ten (11%) people delayed buying a new car, 18% had not taken a holiday abroad and over a fifth (21%) put off buying a luxury item such as expensive clothes or a new gadget such as an iPad. 


However the majority of people still hesitate to put more money towards their mortgage every month, with 58% admitting to never overpaying. Of those who don’t overpay, a fifth think they have too many other outgoings such as household bills, and one in ten were not aware they could overpay on their mortgage or thought it seemed too complicated.


Of those who do not overpay, 44% thought they couldn’t afford the extra payments, yet respondents also said they spent on average £167 each month on non-necessity items, with nearly one in ten (9%) admitting to more than £300. 25-34 year olds admitted to spending closer to £210 on luxuries such as going out for dinner or attending the theatre.


UK mortgage holders engage in many other money saving activities; in the last six months nearly a fifth (19%) switched energy provider, 43% shopped around for more competitive deals on insurance products, 18% used a 0% interest credit card and 48% researched vouchers and deals online.  

 Jody Baker, Head of Money, at comparethemarket.com said:

“As a nation we are getting more proactive in searching for the best deals, whether on energy providers or insurance. Whilst committing more of your pay-cheque towards your mortgage can seem financially daunting, making small contributions each month, or even a one-off lump sum overpayment, could save mortgage holders thousands of pounds in the long term. Sacrificing one meal out at a restaurant or regularly bringing lunch in from home could make all the difference. With interest rates already very low and the prospect of further rate reductions on the horizon, overpaying on your mortgage could be seen as a savvy alternative to traditional saving.

Many lenders will restrict the amount you can overpay, usually to 10% of your outstanding amount each year. If your bank imposes significant penalties for overpaying, depending on your circumstances it could be worth considering reducing the term of your mortgage instead. This will increase the monthly payments so in effect you will be permanently overpaying, though some lenders may charge an admin fee for altering your term.”

Notes to editors:

Calculations: http://www.moneysavingexpert.com/mortgages/mortgage-overpayment-calculator

Number of UK mortgage holders: Of the 15 million owner occupied households, 7.2 million homes were owned outright while the remaining 7.8 million were being bought with a mortgage.


For more information visit http://www.comparethemarket.com/media-centre