Should you be overpaying on your mortgage? How much will the lenders let you overpay each year?

Tags: Offset mortgages, Remortgages, Residential mortgages

Quick Summary

The idea of making regular mortgage overpayments is appealing to many homeowners who want to pay off their mortgage as quickly as possible. But does it always make sense to make lump sum overpayments? How much will the banks and building societies let you overpay?

by Aaron Strutt

Jan 28 2026

Should you be overpaying on your mortgage? For many borrowers, yes—but only if it fits your wider financial picture.

Overpaying a mortgage is one of the most attractive and rewarding things to do to improve your finances. Every extra pound you overpay typically goes directly towards reducing the loan balance, which means less interest paid to the lender and a shorter mortgage term.

Mortgage overpayments can be highly effective, but they must comply with lender rules and not compromise your cash flow or future plans. According to research by Monzo Bank UK, homeowners could collectively save £2.3bn on mortgage interest each year by making overpayments, but they need help to make the first move.

An overpayment could be a large one-off sum or a small regular payment: even as little as £50 a month can add up, as the research revealed. Based on an average mortgage of £195,000 (unspecified term), a homeowner could save a total of nearly £7,000 in interest and cut their loan by one year and 10 months by paying £50 extra per month.

Aaron Strutt, product director at Trinity Financial, says: "Many homeowners like the idea of making overpayments, but they would rather still have access to their cash in the event of a financial emergency. It seems like a good idea to make overpayments on your mortgage when you can, especially if you have an interest-only mortgage, while also boosting your savings or investments. You can use the Bank of England's calculator to work out how much interest you would pay over the mortgage term.

"Most lenders will let you make one-off or regular overpayments. A limited number of lenders still offer offset mortgages, which remain popular with borrowers seeking to reduce their interest payments while retaining access to lump-sum funds.

"Monzo used its survey of 4,000 UK adults to calculate its findings to show that only 34% of mortgage holders currently make overpayments – 3 in 10 of those who do not overpay stated that they don’t do so due to friction or a lack of understanding of the impact of overpayments. Many homeowners prefer to invest rather than overpay or put money into ISAs or bonds. If this is appealing, it makes sense to speak to a financial adviser like ISIO."

How much will lenders let you overpay?

Most lenders allow up to 10% overpayment per year without incurring charges, typically during fixed or discounted periods. After the deal ends, overpayments are often unlimited, but the interest rate is likely to be high.

Some lenders are more generous, offering 20% per year on certain products and unlimited overpayments on early-repayment charge-free or fully flexible mortgages, especially on Bank of England tracker rates. A small minority do not allow overpayments during fixed terms

The rules you need to know before overpaying

Mortgage overpayments are simple—but the details matter. Most banks and building societies now offer apps, so it is relatively easy to set up monthly overpayments and stop them, either online or on your phone. The apps often show how much homeowners can overpay without getting penalised.

1. Early Repayment Charges (ERCs)

Overpay more than your allowance, and ERCs usually apply to the excess. ERCs can be 1% – 7%+ of the amount overpaid.

2. How the allowance is calculated

Lenders may base the 10% on the original loan amount or the outstanding balance, recalculated annually. It is very important to review your mortgage terms and conditions before making any overpayment.

Lender	Overpayment policy
Accord Mortgages	Normally up to 10% unless on an offset mortgage.
Atom Bank	20% overpayments are typically allowed.
Barclays	All of Barclays' current products allow overpayments; however, the allowable amount will depend on the specific product. This ranges from Unlimited on ERC-free products to 5% per annum on 10-year fixed rates. Barclays has mortgages without early repayment charges meaning you can make lump sum overpayments.
Clydesdale Bank	Lump sum overpayments areallowed up to 10% of the mortgage balance duringeach year of theconcessionary rate product without incurring an early repayment charge
Coventry BS	Typically 10% of the outstanding balance per year. The lender offers offset mortgages, allowing you to make much larger overpayments.
HSBC	Fixed-rate and discount mortgages have an annual overpayment allowance equivalent to 10% of the outstanding balance. HSBC has mortgages without early repayment charges, meaning you can make lump sum overpayments.
Hodge	Up to 10% of the capital borrowed can be repaid per annum charge-free.
Halifax	Annually, on the anniversary of the drawdown or the start of the new rate following a switch, it will be based on the current balance, so noramlyl 10% can be overpaid per annum.
Mansfield BS	A repayment ofcapital up to a maximum of10% of the original mortgage advance will beallowed each calendar year during the product term without incurring an early repayment charge.
Metro Bank	You can overpay your mortgage by up to 20% on an annual basis (10% for Buy to Let mortgages) without incurring a charge. If you overpay more than this then you will incur a fee.
Suffolk BS	Up to 50% overpayments on all products during the duration of the product e.g year fixed product will allow 50% overpayments during that time.
NatWest	Applicants can overpay a maximum of 20% of their outstanding mortgage balance in each 12 month period commencing on completion of the mortgage and continuing from each anniversary of that date until the end date of the rate without incurring an early repayment charge. If the mortgage is made up of more than one part they can overpay up to a maximum of 20% of the outstanding balance of each part.
TSB	TSB currently offers a10% overpayment concession.
Nationwide BS	Nationwide typically allows you to overpay up to 10% of your original loan amount each year without early repayment charges (ERCs) for fixed-rate products. For tracker mortgages (after 2 May 2014) or Standard Mortgage Rate (SMR) products, overpayments are unlimited. Some older products may limit overpayments to £500/month.
Santander	Up to 10% overpayment per calendar year without incurring any ERC. The lender offers early repayment charge free tracker rates.

Source: Lender websites and Knowledge Bank

3. What changes when you overpay

You can usually choose to reduce the mortgage term (most interest-efficient), or possibly reduce the monthly payments. It is worth remembering that you will need to reapply to your lender to regain access to your overpayments by applying for additional borrowing. This is not ideal for a few reasons, including the lack of a guarantee that the lender will accept your request, especially if the lenders acceptance criteria have changed, or your income has declined, your debt has increased, or you have more dependents. Also, you will likely have to pay a higher additional borrowing rate, meaning your mortgage is likely be in two parts if your requested additional borrowing is accepted.

Does overpaying always make sense?

Overpaying usually makes sense if your mortgage rate is higher than the returns on savings and you already have an emergency fund. It often makes sense to have access to enough cash to cover three to six months in case you lose your job or your personal finances change. Also, if you’re not giving up employer pension contributions, and you may remortgage soon and want a lower loan-to-value.

It may not make sense if you expect to move soon, need liquidity or flexibility. Additionally, if you can get a better return by making another investment, or if you have an alternative way to repay your mortgage, especially if it is on a full or part interest-only basis.

It is important to have additional life insurance or critical illness cover, especially if you are making overpayments and reducing access to your savings. To take out a policy, you can speak to Conor Coleman, our financial protection specialist.

Mortgage solutions with Trinity Financial

Are you looking to buy a property or remortgage to raise funds for home improvements and require expert advice? We’re here to help you find a solution – no matter how complex your circumstances. Our expert brokers have extensive experience providing creative solutions to secure mortgages for our clients.