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What is an overpayment and what are the benefits?
What is an overpayment and what are the benefits?

An overpayment is any money paid towards your mortgage in addition to your monthly contractual payment.

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Written by Ashley Currie
Updated over a week ago

An overpayment is any money paid towards your mortgage in addition to your monthly contractual payment. This is optional, and there is no requirement for you to make any additional payments.

You can choose to overpay regularly into your mortgage alongside your monthly direct debit or make ad hoc overpayments. Overpayments can only be made via direct debit.

What are the benefits of making overpayments?

Overpayments allow you to pay down your mortgage faster and ultimately become debt-free sooner. Making an overpayment reduces your capital loan amount, which means you’ll pay less interest over the life of your loan.

Once you’ve made an overpayment, it cannot be refunded, and it cannot be used to offset any future missed monthly contractual payments. Be sure that any overpayments you make won’t stretch your budget.

How does my overpayment impact my mortgage?

When you make an overpayment, we apply this to shorten the term of your mortgage, or you can choose to reduce your monthly payment if you'd prefer.

Every year, we re-optimise your mortgage account. This means we recalculate your mortgage term or monthly payments, taking into consideration any payments you’ve made.

Your reduced mortgage term or lower monthly payments will come into effect on the day we re-optimise your mortgage account. This will happen on the anniversary of your loan or when you've repaid 5% of the amount you owe, whichever comes first. Your direct debit will update when we re-optimise your account if you've chosen to reduce your monthly payments.

Your interest savings begin as soon as your overpayment funds have cleared, not when we re-optimise your account.

Just so you know, it can take up to 5 working days to set up an overpayment.

Please follow this link to understand how to make an overpayment.

You can request to make overpayments to us at [email protected] or via live chat.

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