senior man and woman in street asking about overpaying their mortgageMany mortgage borrowers are now making overpayments to reduce the impact of higher interest rates. A recent study undertaken for Barclays Bank found that nearly a quarter of homeowners overpaid their mortgage.
Should you consider overpaying your mortgage?
 

Why should you overpay your mortgage?

  • Overpaying allows you to save on your interest payments. This saving can be substantial over the term of the mortgage.
  • You will own your property outright sooner.
  • With more equity (the difference between your house value and the outstanding mortgage) in your home, you could be able to
    get a better rate on your next mortgage deal.
  • You would be less likely to move into negative equity if house prices fall.
  • Low rates on savings accounts.

Why should you not overpay your mortgage?

  • If you have other personal borrowings like credit cards or personal loans. Then these debts should be looked at first. The
    interest rate on this type of unsecured borrowing is normally higher than that on your mortgage.
  • You need some available cash. You may have to dip into that emergency fund you have for unexpected car repairs or if the
    boiler needs replacing.
  • Do not over-commit. It may be easy to overpay, but it is never as easy to take the money out again with an additional mortgage
    advance. Budget carefully, especially if your income fluctuates with overtime and bonuses.
  • Check that you can overpay your mortgage. Most lenders allow you to overpay your mortgage by up to 10% even if you have a
    fixed or discounted rate. Check your mortgage offer or speak to your mortgage broker.

PFS logoShould I have an offset mortgage?

With an offset mortgage, your savings are linked to your mortgage. Instead of earning interest on your savings, the money is
set against your mortgage. As a result, you pay less interest on that debt. This allows you to benefit from reduced payments or
to use the savings to reduce the mortgage balance. So, paying your mortgage off sooner.
Additionally, an offset mortgage provides you with the flexibility that you can draw the money back should you need it at any
time. However, you will lose the benefits of the balances from your offset.
Interest rates on these flexible offset mortgages are normally higher. Our team of mortgage brokers will help you see if it is right
for you.
 

How Anstee & Co can help with your mortgage.

We are a firm of Independent Mortgage Brokers. This means that we look at all of the mortgage options open to you. This is
unlike some mortgage advisers who will only offer their own products or work from a limited panel. Our advice is unbiased. We
can show you how an offset mortgage works to see if it is the right solution for you.
call back logo for help with a mortgageThe initial meeting is free and without obligation. Why not arrange a meeting today to discover your options.
Our Head Office is located at-
  • Kettering, Northamptonshire
Our team of mortgage advisers live and make use of meeting rooms in-
  • Bedford, Bedfordshire
  • Market Harborough, Leicestershire
  • Northampton, Thrapston, and Wellingborough in Northamptonshire.
We make full use of video conferencing facilities such as –
Microsoft Teams
We can meet in person, by video conference, or by phone—whichever suits you best.
 
If you have any thoughts on this article, “Overpaying your mortgage? Should you?”, then we would love to hear from you.
 
Financial Conduct Authority
Finally, the information contained in this article is for information purposes only and does not constitute advice. Anstee & Co. is
authorised and regulated by the Financial Conduct Authority (FCA).
 
AS A MORTGAGE IS SECURED AGAINST YOUR HOME, IT COULD BE REPOSSESSED IF YOU DO NOT KEEP UP THE MORTGAGE
REPAYMENTS