Should I Overpay my Mortgage?

These days mortgages often give you the option to overpay. This means that you pay more than the monthly amount in order to pay it off early. This can help to save you a lot of money in the long term, because you get the full amount paid off more quickly.

There is often a charge with being able to do this. Some mortgages which have the option to pay back early will have a higher interest rate and some have a fixed fee. It is also worth noting that it is not always financially worth paying it back early.

If you are lucky enough to have an extremely low mortgage rate, you might be able to make more money if you invest the money you were going to use to overpay. You might be able to get a better return on the money that way if you can earn more in monthly interest on it than you are paying on your mortgage. It is not always that easy to do this, but if you have a really good mortgage deal and a good place to invest your money, then it can work out really worthwhile.


Overpaying can help to shorten the term of your mortgage and not only will this help to reduce the amount of interest that you pay on it, it will also help you to feel better about your financial situation. You will no longer be in debt and that has to be a good feeling. Some people real feel the burden on mortgage debt hanging over them and want to pay it off as soon as they can. Others do not worry so much about it.

Whether you decide to pay it off or not, should be determined by which option is best financially rather than how you feel about the burden of debt. Just think about it as a good debt if it keeping it is making you better off. However, keep a close eye on interest rates on your various accounts, to make sure that you are still benefiting from what you are doing.

It may seem like hard work, but it can end up making a significant difference to your financial situation. If you can make money by investing it instead of paying off your mortgage then this is a great thing as it will mean that in the long run you will be able to pay it off even more quickly than if you overpay.