Martin Lewis suggests when to overpay mortgage as Briton saves £35,000 in interest: ‘Very lucrative!’

Martin Lewis suggests when to overpay mortgage as Briton saves £35,000 in interest: ‘Very lucrative!’

Roger Gewolb says the Bank of England 'absolutely' needs to start lowering interest rates

Patrick O'Donnell

By Patrick O'Donnell

Published: 17/04/2024

- 13:41

Updated: 17/04/2024

- 14:02

Experts, including Martin Lewis, are offering some suggestions on how mortgage holders could bring costs down

Martin Lewis is outlining the “very lucrative” way homeowners can save money on their mortgage payments after a man made a saving of £35,000.

The financial journalist suggested regular overpayments could be a key way people can bring costs down and reduce their mortgage term.

If someone earns £400 interest from £10,000 in savings with a four per cent interest rate, he claims using this amount overpay a six per cent mortgage be “very lucrative”.

According to the money journalist, Britons could save £600 in interest.

Writing in the Money Tips newsletter, the Money Saving Expert founder explained: “Using the savings to overpay is a winner - it's a bit like saving, tax-free, at the mortgage rate. Done right, it can be very lucrative.”

The money saving expert highlighted how Paul, a Money Saving Expert reader, was able to use this method to bring his mortgage costs down long-term.

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Martin Lewis and mortgage calculator

Martin Lewis is breaking down the benefits of mortgage overpayments


Paul and his wife moved jobs seven years ago and purchased a property to use for the purposes of work with a 100 per cent mortgage.

Having listened to Lewis’s money tips in the past, he set up a regular, albeit small, mortgage overpayment to pay it off quicker.

He also put any money made during overtime work towards overpayments and would regularly check their bank balance.

Paul said: “We've saved £35,000 in interest and knocked 10 years off our mortgage which are originally 27 years.

“We're continuing to plan to get rid of the mortgage altogether as soon as possible. Thanks for all your help and advice.”

Anyone interested in doing the same can use Money Saving Expert’s mortgage overpayment calculator to break down the savings that could be made.

In recent years, homeowners have been saddled with rising mortgage repayments thanks to a wave of mortgage rate hikes.

Lenders have cut mortgage rates of late, and the Bank of England is expected to slash the base rate in the later half of this year, in good news for borrowers.

Savers can currently still benefit from inflation-beating interest rates on certain accounts. Lewis highlighted that 1.5 million households are expected to see their fixed rate deal end this year which will pull them into higher interest rates.

While overpayments could be useful in bringing peoples’ mortgage costs down, Lewis said there are various factors borrowers will need to consider before doing overpaying.


Bank of England base rateThe Bank of England base rate is currently at a 15-year high of 5.25 per cent GB NEWS

These include making sure people are getting the highest savings interest rate they can get, checking for overpayment penalties and keeping an emergency cash fund available.

According to the finance expert, people should overpay “the right way” and put extra cash towards reducing their term. Shortening the term of someone’s mortgage deal will result in an interest gain, according to Mr Lewis.

However, if someone is on a cheap mortgage rate, he recommends keeping money in top savings than using it for regular overpayments.

Despite this, the financial journalist suggests homeowners should continue saving in this way, so the money is accessible when a deal ends.

Martin Lewis is the founder and Chair of

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