Overpaying on either a residential or commercial mortgage offers significant benefits. It reduces total interest costs and shortens the repayment period. This leads to accelerated equity buildup and increased financial flexibility. Even modest, regular overpayments can yield substantial interest savings over time.
Page written by Ian Hawkins. Last reviewed on June 20, 2024. Next review due April 6, 2025.
This calculator is intended for illustration purposes only and exact payment terms should be agreed with a lender before taking out a loan.
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Get a quoteMortgage overpayment is when you pay more than your required monthly mortgage payment. This can help reduce your overall debt faster and save on interest payments over the life of the loan.
Overpaying your mortgage can save you money on interest and help you pay off your loan faster. However, consider if you have other high-interest debts or better investment opportunities before deciding.
Many lenders allow you to overpay up to 10% of your outstanding balance each year without penalties. You can check your mortgage terms to understand your limits.
Overpaying can be worth it if you want to reduce your debt quickly and save on interest. But, it's important to balance this with other financial goals, like saving for retirement or building an emergency fund.
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