Make an overpayment

Paying more towards your mortgage than your monthly payment is known as an overpayment. Overpaying could save you money as you’ll pay less interest over the length of your mortgage.

When your mortgage is on a fixed interest rate, you can normally overpay up to 10% of your balance without paying an Early Repayment Charge (ERC). This is known as your overpayment allowance. The balance is based on the amount you owed on the last 31st March of the previous financial year. You can see your allowance by logging into your mortgage hub.

You can overpay as much as you like if your mortgage isn’t on a fixed rate.

Check how making regular or one-off larger payments can reduce your monthly payment or length of your mortgage. You can do this by using our overpayments calculator.

Overpayment calculator

How can I make an overpayment online?

You can make multiple overpayments online up to £12,000. These will be applied to your mortgage account within five working days. Just log in to your hub or use the button below. You’ll need to make any payments over £12,000 by bank transfer.

Please get in touch if you’re visually impaired and use a screen reader.

 

How can I overpay from my bank account?

You can make a payment by bank transfer using BACS or CHAPS or you can set up a Standing Order. You can do this through your bank’s mobile app or website or give them a call.

You’ll need our bank details for these types of payment. You’ll find these by logging in to your hub then select Tools and How can I make an online payment. Having these details in your hub helps to keep your money and us safe from fraud.

Please get in touch if you’re visually impaired and use a screen reader.

To make an overpayment, you’ll need:

  • Your mortgage account number – you’ll find this in your hub or on your Annual Mortgage Statement
  • The postcode of the mortgaged property
  • Your debit/credit card.

When making your payment, please remember:

  • You must pay by 6pm on the last day of the month if you want it applied to your account in the same month
  • Your payment will be made to your account the following month if you pay between 6pm and midnight on the last day of the month. This means when we add the interest to your account for the current month, your payment won’t be included
  • You should get in touch each time you make an overpayment by BACS or CHAPS. This makes sure we can apply it to your account as soon as we can, so you pay less interest overall.

This doesn’t affect your credit score.

 

Can I pay by credit card?

You can, but you should bear in mind:

  • Your card company may charge you fees and interest for making the payment
  • Once payments are made, they can’t be refunded
  • Paying by credit card can lead to increased debt. Visit our help and support page if you’re struggling to pay your mortgage.

 
Make a payment

When will you reduce my monthly payment?

We’ll automatically reduce your monthly payment when:

  • Your overpayment is £500 or more
  • The total of your smaller overpayments reaches £500. For example, if you overpay £100 per month, we’ll reduce your payment after five months. Until then, your overpayments will be paid to your account, so you’ll pay less interest, but it won’t affect the monthly amount you have to pay.

Once we’ve applied your overpayment to your account, your new payment will take effect from the following month. This means if we apply your overpayment in June, your monthly payment will be lower from July. We’ll write to you before we make any changes to your mortgage.

 

Can I reduce the length of my mortgage instead?

You must apply to reduce the length of your mortgage, known as your mortgage term. You can only reduce the term to keep your monthly payment about the same as it is before you make your overpayment. The amount you pay must be at least £500 and enough to reduce your term by one month’s payment. Read our reduce your term page for other details.

  • When will my overpayment be applied to my account?

    Your payment will be applied to your account within five working days if you make your payment using your hub or our website. If you pay by BACS or CHAPS, get in touch to let us know. We’ll then apply it to your account within five working days.

  • Do I need to tell you when I’ve made an overpayment?

    You only need to get in touch when you make an overpayment by BACS and CHAPS. This makes sure we can apply it to your account as soon as we can, so you pay less interest overall.

  • What happens if my mortgage is made up of more than one account?

    You should get in touch if you want us to apply your overpayment to a specific account. If you don’t, we’ll automatically apply it to the account which will benefit you more. For example, if your mortgage is made up of a repayment account and an interest only account, we’ll apply the overpayment to the interest only account. This will reduce the amount you owe us. You may see your overpayment in your hub as a credit before it’s applied to the account.

    You can see how much you can overpay for each account by logging in to your hub.

  • When do I need to pay an Early Repayment Charge (ERC)?

    You’ll pay an ERC when your mortgage is on a fixed interest rate and:

    • You pay more than your allowance in any financial year.
    • You ask us to apply payments to your account which are less than £500.
  • Where can I find my Early Repayment Charge (ERC) details?

    You’ll find when you have to pay an ERC and how much will be charged in your mortgage Offer. You won’t pay an ERC if your mortgage is on a variable rate.

  • How do I apply for a new interest rate and overpay at the same time?

    You can apply for a new rate up to four months before your current deal ends. To overpay and switch at the same time, give us a few details and we’ll be in touch.

  • How much I can overpay if my fixed rate has ended?

    You can pay any amount without paying an Early Repayment Charge (ERC) once your fixed rate has ended.

    Get in touch if your overpayment balance is less than £500 and you want it applied to your account. If you don’t tell us, it will only be applied when the total overpayment balance reaches £500. Until then, your overpayment will be paid to your account, so you’ll pay less interest, but it won’t affect your monthly payment.

    We’ll write to you confirming how much your monthly payment will be once an overpayment has been applied to your account, unless you apply to shorten the length of your mortgage.

  • Why has my overpayment been used to repay the balance owed from my payment break?

    When you took your payment break in 2020/2021, you paid nothing off your mortgage. When the payment break ended, you were given different ways to pay back the payments to cover the amounts during that payment break period. These payments were added to your outstanding balance. One of the choices was to pay extra on top of your monthly payment until your payments were back up to date. Your overpayment has been used to reduce or pay back this amount.

    Once your mortgage balance any money left from your overpayment will be used to reduce your monthly payment, unless you apply for to shorten the length of your mortgage.

  • How is interest adjusted when I make an overpayment?

    For overpayments of £500 or more – interest will be automatically adjusted from the date we have your payment.

    For overpayments under £500 – get in touch to let us know you’ve made the payment. We’ll then manually adjust the interest from the date we have your payment. Your interest can’t be adjusted if you don’t tell us that you’ve overpaid.

  • When will my overpayment show up on my hub?

    The balance on your mortgage will include any overpayments we’ve applied to your account. You should see the update your account the day after we receive the payment. You may notice that the balance hasn’t been reduced by the amount of the overpayment. This is because the monthly interest on your mortgage is added to the amount you owe us (your mortgage balance), at the start of each month. Your monthly payment will cover this interest. However, your balance will appear higher if your monthly payments are made later in the month. This is because of the interest added to your account until your payment is made.

    For example, your monthly interest is added to your mortgage balance on the 1st of the month and your monthly payment is due on the 17th. Between the 1st and 16th, your balance will appear higher due to the interest added to your account between the 1st and the day before you make your payment. So, if you made an overpayment of £1000 on the 5th and your monthly interest was £100 your balance will reduce by £900 until your monthly payment is made.

  • Why is the balance different between my overpayment confirmation letter and the amount shown in my hub?

    This will only affect you if your mortgage account number starts with 0.

    The interest you pay each month is the amount charged for the month before it. For example, if your monthly payment is on 26th June, your payment will include the interest charged from 27th May to 26th June.

    The balance in your letter – includes the interest charged from your last payment date up to the date of your letter.

    The balance in your hub – shows your payments made up to today but only the interest charged up to your last payment date.

 

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