Best way to overpay…


Hi All,

I’m looking for some advice on the best way to overpay a mortgage as our plan when we bought our home was to clear the mortgage as soon as possible. 

We were first time buyers and our mortgage details are:

Mortgage taken out May 2019

Mortgage amount £411,000

Interest rate 3.28% fixed rate until 31/05/2024

Monthly payment £1,646

Mortgage term 35 years

During the first year of our mortgage we built up our savings so that we have a buffer.

From the start of year 2 we continued to save our discretionary income and I’ve been allocating £2,000 per month of this discretionary income with the plan to pay it off of our mortgage at some point.

We can pay 10% off each financial year with no early repayment fee. My question is, should I pay £25,000 off each financial year for 4 years or should I pay the £100,000 at the end of the fixed term when we remortgage? I’ve done my own research but I’m still unsure of the best way to proceed or whether both options provide a similar outcome. I’ve asked our mortgage provider and if we make an overpayment the monthly payment reduces and the term remains the same.

Of course my calculations above are based on our current discretionary income and I’m fully aware that this could change at any point.

Many thanks,



  • getmore4less
    getmore4less Posts: 46,882 Forumite
    Name Dropper First Anniversary First Post I've helped Parliament
    mortgage interest costs are based on interest rate amount borrowed.

    You can't change the interest rate(because you fixed for 5 years)

    You can change the amount borrowed
    The sooner that goes down the sooner you pay less interest

    Don't wait get paying if you have spare cash earning less than the mortgage rate.

    there are also pension that can make very good use of 40% taxed money, better than paying down a mortgage in most cases.

    not sure what research you have done but it should have got you something like this.

    do nothing and wait 5 years
    amount rate payment owing interest
    £411,000.00 3.28% £1,646.65 £376,934.12 £64,733.35

    do nothing for 1 year
    amount rate payment owing interest
    £411,000.00 3.28% £1,646.65 £404,625.69 £13,385.54

    start paying £2kpm extra from year 1  ( or save £96k).
    amount rate payment owing interest
    £404,626.00 3.28% £3,646.65 £274,501.68 £44,914.88

    save around £6,400 in interest    
    you will save a bit more if you max out the 10% each year and then to top up your savings through the year

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