Should I Repay my Mortgage Early?

There are many people that do say that we should be repaying our mortgages off early. There are good reasons for doing this, but it is worth checking whether this will be the best decision for you. There are pros and cons and things you should check out before deciding whether this is the right decision for you.


The cost of a mortgage is mainly the interest on the money that you owe. If you owe more money or money for longer then you will pay more in interest. This is because the interest is a percentage of what you owe. Therefore, if you can reduce the amount that you are borrowing and the time it takes you to repay, you will save interest. The interest rates on mortgages tend to be relatively low compared with other types of borrowing though. Therefore, if you have other loans, it could be worth considering whether it will be better to repay those rather than your mortgage so that you can save even more money. Perhaps when they are repaid you can then see if it is worth repaying the mortgage.


There are some lenders that will charge a fee if you repay early. This may come as a surprise when many mortgages are flexible and almost encourage early repayment or overpayment. However, they vary a lot and you will need to check the terms and conditions of your mortgage to see whether it will be a good idea for you to repay yours early or not. Some may just have a small admin fee but others may have a large penalty. Contact your lender and find out as if the charge is big, it may mean that it is actually cheaper to keep the mortgage than to repay it early. You will need to calculate how much interest you think that you will pay for the term of the mortgage and see whether that will be significantly more than the charge or fees and decide whether you feel that it is worth repaying it early bearing in mind what you will have to pay for this fee.

How you Will Manage

It is also well worth thinking about whether you will manage these extra payments on the mortgage. Think about what changes you will have to make in order to make them. You may have to find extra work in order to earn more, you might have to spend less and give up buying things that you like. This can be easier for some people than for others. It can also depend on how motivated you are. If you really want to save the interest money and get rid of the mortgage quickly, then this could probably make it easier for you to make the changes required to achieve it. However, if you know it is a good idea but are not that bothered about paying the interest if it means that you can continue as you are, then it is probably best to just stay as you are. You could come to some compromise too. Perhaps remortgage and switch to a cheaper mortgage provider so that you pay less interest. This will mean that you repayments will be lower than you are used to. However, if you pay a bit extra so that they are the same as you are used, you will still be able to repay the mortgage earlier but will not notice any difference. You could also just pop lump sum payments into the mortgage account if you have some spare money and again, you will not notice any difference to your lifestyle as a result. It is worth thinking about what will work for you.