With it being the time that we all start thinking about keeping our new year’s resolutions, have you ever paused to think about the benefits of making additional payments on your mortgage?

Making additional payments on your mortgage can be a great way to not only clear the loan quicker, but also save on interest payments at the same time. There’s a lot to consider and whether you’re able to make one off or regular overpayments, it’s certainly worth giving some thought.

We’ve pulled through a couple of helpful illustrations that highlight how making additional payments on your mortgage could work. If you’d like to create an illustration for your circumstances, then we recommend Natwest which has an interactive calculator.

Our illustrations are based on a £200k mortgage over a 25-year term at a rate of 4.5%. Starting with an additional monthly payment of £200, you could clear your outstanding debt six years and one month earlier, saving £36,280 in interest. That’s not a small amount!

Things start getting interesting however, if you’re able to make larger overpayments as an additional payment of £500 per month leads to your loan being repaid 11 years and four months earlier, saving £63,887 in interest – nearly halving your term!

Where you’re able to make an additional payment of £1k each month, you can save £85,961 in interest and clear the balance 15 years, two months earlier. That £85,961 saving is significant – being a couple of years worth of the UK average salary of just under £35k!

If you’re thinking about overpaying on your mortgage, it’s important to speak with your lender to check whether your mortgage has any overpayment limits. Overpayment charges may also apply, so we recommend checking this with you lender as well.

These illustrations serve to demonstrate how, perhaps, buying something like a second-hand car as opposed to one on lease and using the funds to pay down your mortgage instead could bring about some quite significant savings in the long run!