Should you overpay your mortgage?

Are you considering making mortgage overpayments? Here’s what to consider.

If you can afford it, there are many advantages to overpaying your mortgage, such as:

• Becoming a step closer to being mortgage-free

• Reducing the amount of interest you owe

• Lowering your loan-to-value ratio (LTV).

However, before you make overpayments it’s vital to check the following:

• Is there an early repayment charge (ERC)? Many lenders allow borrowers to pay off 10% of the mortgage balance each year without a fee, but you must double check the terms of your deal.

• Do you have other debts that you should settle first?

• Would it be more beneficial to place your extra cash elsewhere, such as a savings or pension pot?

Your home may be repossessed if you do not keep up repayments on your mortgage