Wannabee Mortgage free

Hi all,

We want to be mortgage free before I am 60- this is do-able for us by overpaying. My question is do I overpay a small amount each month or do I pay a lump sump annually. Does it actually make any difference?

Mortgage is with Santander and we have 8 years 9 months left at present. Balance is approx £86000. No other debts.

Want it to be paid by December 2024.

Any advice is appreciated.

Deb x:money::T:T:T


  • I'm no expert - so please don't take this as specialist advice, more informed opinion.
    I'm in a similar position to you - overpaying a Santander mortgage. However, it is on 50% of a flat, and I am overpaying so that I am in a better position to staircase.
    I am currently on the SVR, so can make limitless overpayments without penalty.
    So, the first question that you need to answer is whether you can make limitless overpayments, and if not what the maximum that you can overpay is.

    Beyond that my opinion is to overpay whenever you can, so would go for monthly from your two options. The only way that waiting for a year to make annual lump sums would make more sense, would be if your were investing the money in an account that pays a greater level of interest than your mortgage is charging (which I reckon is unlikely).
    When I overpay on Santander, it tells you after the transaction how much money you have saved in interest and how much you have reduced the term by. So try an overpayment and see what you are told.
    There is also a really cool overpayment tool on the main MSE site - so you can put in different values and scenarios (regular monthly overpayment, one-off lump sum, combination of the two) and experiment for your situation.

    Hope that helps! :)
  • beanielou
    beanielou Posts: 90,707 Ambassador
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    All depends on your current mortgage deal I would say.
    SVR? Fix? Terms & conditions.
    I am a Forum Ambassador and I support the Forum Team on Mortgage Free Wannabe & Local Money Saving Scotland & Disability Money Matters. If you need any help on those boards, do let me know.Please note that Ambassadors are not moderators. Any post you spot in breach of the Forum Rules should be reported via the report button , or by emailing forumteam@moneysavingexpert.com. All views are my own & not the official line of Money Saving Expert.

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  • [Deleted User]
    I would pop over to the MFW board, someone on there will defo be able to help.

    Good luck!

  • socks_uk
    socks_uk Posts: 2,813 Forumite
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    Like the others have said, it depends on the T&Cs of your mortgage.

    My husband and I recently (January 2019) came to the end of of a 10 year fixed rate which we had at 5.4% with Nationwide and we fixed for another 10 years with Nationwide at 2.79% and, whenever we can, we will keep paying the same amount as we did for 10 years on the old rate. I can see that so far we have overpaid by £842. As of today our mortgage balance is just under £48,000 with 9 years 4 months of the 10 years fixed rate to go so Hopefully we will be fully paid up before then.

    As for overpaying monthly or as a lump sum... I guess it depends if you earn interest on your lump-sum wherever it is being held before you pay it off your mortgage. If you're not earning interest then pay it in monthly but if you are earning interest, is it earning more, or less, than your mortgage interest rate. We don't earn interest in our bank account so we pay it monthly (and we aren't tempted to spend it on something else).
    Starting Debt 21st August 2019 = £11,024
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