Put any bonuses you receive towards your mortgage and see the savings

Perhaps you receive an annual bonus. Do you know that by investing these sums in your mortgage you could save thousands of pounds in repayments and pay off the loan several years early?

Mortgage broker CharcolOnline.co.uk reckon that a £2,500 bonus paid into a mortgage could not only pay off the loan 1year+ earlier, but also save approximately £5,000 in repayments over the loan term.

Paying in a £15,000 amount could take 3years or more off the mortgage term, saving a whopping £26,500 in mortgage repayments.

Katie Tucker from CharcolOnline points out that many borrowers are able to “overpay” their mortgage without incurring any early repayment charges (ERCs)-something that not everyone is aware of.

She goes on to say that 10% per annum is the most popular amount which can be paid without involving ERCs, however there are some lenders who will allow unlimited overpayments which would enable their borrowers to overpay large chunks of their mortgages.

Ms.Tucker does advocate checking with your own particular lender before submitting any extra payments since any overpayments which breach that lender’s terms could carry with it a hefty penalty.

If you have selected a mortgage with flexible features, you may be able to overpay and reborrow at some point in the future should you require it.

Ms.Tucker also remind us that any overpayments do not necessarily need to be paid in a lump sum. Take for example a wage increase, you could arrange for that little extra every month to go into your mortgage account.

The following figures give you examples of how overpaying can cut down your repayments and term times :