Mortgage overpayments and underpayments

Overpaying and underpaying your mortgage simply means paying more or less into the account than your normal monthly payment. In this guide, we’re going to explain when and how you can make overpayments, and tell you about the benefits paying more can bring.

Once you’ve made an overpayment, you can’t get a refund – and remember that you’ll need to make your monthly payments as usual.

How overpayments affect your monthly payments and mortgage balance

Every overpayment you make means you pay less interest overall on the money you borrowed from us. Overpayments do one of two things to your mortgage balance, depending on the amount.  

Overpayments higher than 3 times your usual monthly payment

These reduce your monthly payment. That means we recalculate your monthly payment but your term stays the same.

Overpayments lower than 3 times your usual monthly payment

These overpayments help you pay off your mortgage sooner but your monthly payment stays the same. They go into an ‘overpayment balance’, which we take into account when working out your interest charges. The overpayments build up to an amount that can help you pay off your mortgage sooner. It can also enable you to make underpayments in future, which we explain in detail below.

Revised monthly payment higher than expected?

When we work out your new monthly payment amount following a change to interest rates, the amount stored in your overpayment balance isn't taken into account – so your monthly payment may be higher than you expect.

If you want us to use all or part of your overpayment balance to reduce your monthly payments, please log in to Online Banking and start a web chat or call us¹ on 0333 202 7580, so we can explain your options. Lines are open all the time, every day – except during the Christmas period, when they may be closed at off-peak times.

Overpayment limits and early repayment charges

Before making an overpayment, please check your mortgage documents to make sure that you’re able to do so. The documents also include details of any overpayment limit and early repayment charges you may have to pay.

Paying more than your limit means you may need to pay an early repayment charge. If you’re in any doubt about this, call us on 0333 202 7580. 

How to make overpayments

Register for Online Banking if you haven’t already.

Making a one-off overpayment

Transfer a payment from a current or savings account you have with us

Log in to Online Banking or our app and choose 'Single overpayment'

Make a payment by debit card – but we can only accept up to 3 times your usual monthly payment that way

Log in to Online Banking or our app and choose 'Make a debit card payment'

Transfer a payment from an account you have with another bank.

Log in to Online Banking to find the sort code and mortgage account number you’ll need to make your overpayment.

Making a regular overpayment

Set up a Direct Debit

Log in to Online Banking and select ‘Regular overpayment’

Set up a standing order

Log in to Online Banking to find the sort code and mortgage account number you’ll need to make your overpayment.

You can also call us on 0333 202 7580 to make overpayments.

Overpayment questions?

If you have a question about making overpayments or early repayment charges, you can log in to Online Banking and start a web chat, or call us¹ on 0333 202 7580.

Getting agreement to make underpayments

Underpayments aren’t available on all of our mortgages. You'll need to log in to Online Banking if you’ve registered, or check your mortgage terms and conditions, to see if that feature is available to you. You’ll also need to have made enough overpayments in the past to cover any underpayments you want to make. 

If you’re eligible on both points, call us on 0333 202 7580 to discuss making overpayments. Please remember that you must always make your normal monthly payment unless we have agreed otherwise. And if you’re thinking about underpayments because you have money worries, it’s better to call us to talk about it. The sooner we talk to you, the more options we can offer to help you manage through any difficulties. 

Are overpayments right for you?

If you’re unsure whether making overpayments is right for you, please call us on 0333 202 7580 to book an appointment to speak to one of our mortgage advisers.

If you have any outstanding payments or charges on your account, call us on 0800 022 4022 before making any overpayments. Lines are open Monday to Friday, 8:30am to 5.30pm and Saturday 9am to 1pm.

Reducing your mortgage balance can be a good way to make use of any spare money you have, but it’s a good idea to ask yourself a few questions first.

Do you have other debts that could be costing you more, such as a credit card balance or overdraft? If so, then it may be better to use your money to deal with those debts.

Is it possible that you could need that money for an emergency? Once you’ve made an overpayment, you can’t get that money back. If you think you’ll need access to cash, then putting some or all of your spare money into a saving account or ISA might give you more flexibility.

Watch our videos guides

Watch our short videos below to see how easy it is to make an overpayment to your mortgage