By James Evans, Director, TouchPoint Mortgages.
Paying off your mortgage can be a huge relief – it’s a milestone that brings not only financial security but a real sense of achievement. If you’re aiming to become mortgage-free sooner, then shortening your mortgage term could help you reach that goal more quickly while saving you thousands in interest.
Many first-time buyers opt for long terms – often between 25 and 40 years – to keep initial monthly payments low. But over time, as circumstances improve, it often makes sense to look at reducing your mortgage term.
Clearing your mortgage early doesn’t just improve your lifestyle – it can give you more flexibility in later life, make early retirement more achievable, and allow you to save or invest more freely.
Here’s why it matters: on a £250,000 repayment mortgage at an interest rate of 4.5%, you would pay:
Around £130,000 in interest over 20 years
Over £205,000 in interest over 30 years
That’s a potential saving of £75,000 by paying your mortgage off 10 years earlier.
So, how do you do it? Here are five practical ways to shorten your mortgage term.
Just because you started with a 30- or 35-year term doesn’t mean you have to stick with it. When your current mortgage deal ends, it’s a great time to review your term.
If your financial position has improved – perhaps you’re earning more or have reduced other debts – then you may be able to switch to a shorter term. This could be done without increasing your monthly payments by too much, especially if your equity has grown and your new rate is lower.
You can book a free mortgage review to see what your next steps could look like.
Instead of making one payment a month, try splitting it in half and paying every two weeks. This method results in 13 full payments a year instead of 12.
Why it helps:
That extra payment goes straight towards reducing your loan
You reduce your balance more frequently, which can lower the amount of interest charged (especially if interest is calculated daily or weekly)
Just make sure your budget can handle months where three payments might fall, particularly if you’re paid monthly.
This is a small step that can add up. If your mortgage payment is £1,120, rounding up to £1,200 could reduce your mortgage term by more than two years and save you nearly £8,500 in interest (based on a £250,000 loan over 30 years at 4.5%).
You can get in touch to see what this could look like for your own mortgage.
If you’re on a tracker or variable-rate mortgage, your payments may fall if the interest rate does. But instead of enjoying the lower monthly cost, you could continue paying the higher amount you were used to.
This strategy works like an overpayment – helping you reduce your loan balance and interest paid without changing your monthly budget.
You don’t need to overpay every month. If you receive a bonus, inheritance, or tax refund, consider using some of it to make a one-off overpayment on your mortgage.
It’s flexible, and it can have a huge impact over time. Just check whether your lender allows overpayments – many permit up to 10% of the outstanding balance per year without an early repayment charge.
Before making any extra payments, check your mortgage terms carefully. Some lenders impose early repayment charges (ERCs) if you go over the permitted overpayment threshold. This is typically up to 10% of your balance each year, but it does vary.
At TouchPoint Mortgages, we offer free initial advice and will guide you through your options – whether that’s remortgaging, adjusting your term, or working out the best way to overpay.
Speak to one of our experts or complete our quick form to start your journey toward becoming mortgage-free.
Send your message and we will be in touch, alternatively you can book an appointment to chat to one of our team.
