Mortgage free: How savers could slash years off mortgage term | Personal Finance

Getting a mortgage is a big commitment many people will opt for in order to buy a property. According to the Money Advice Service, most mortgages run for 25 years – although the term can be longer or shorter.

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Whether it’s to save money in the long-term or to enjoy living without needing to pay for accommodation, many people may hope to pay off their mortgage and become mortgage free sooner rather than later.

While it’s not something everyone will opt – or be able to afford – to do, some people may consider steps they can take in order to do this.

Richard Hayes, CEO and co-founder of digital broker Mojo Mortgages, has shared some insight into ways that this can be done.

Speaking to, he said that this may include making overpayments when a borrower can afford to do so.

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Mortgage free may be an aim for some borrowers (Image: GETTY)

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Mortgage free: Some people may look at the type of the mortgage they have in an effort to reduce the term (Image: GETTY)

“Most lenders allow you to overpay by 10 percent each year while on a fixed term,” he said.

“Overpaying your mortgage means you’ll have less to pay in future years and can therefore own your home outright earlier.

“Another way to become mortgage free sooner is to shorten your mortgage term. However, this will mean that your payments will be spread over a shorter period of time.

“This will result in your monthly payments increasing, so make sure you are in a financial position to meet these higher costs.”

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The type of mortgage a person may have could also play a part in reducing a mortgage term, Mr Hayes suggested.

He explained: “If you’re on an interest only mortgage, switch this to a repayment mortgage to ensure you are clearing the capital and interest. Also, make sure you are reviewing your mortgage regularly to ensure you’re on the best rate.

“If you’re on a variable rate you could be paying double the interest.”

It may be that some people are able to use savings to offset your mortgage, and this is something which Mr Hayes explained some people may consider.

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Mortgage free: Some homeowners may opt to take steps to reduce a mortgage term (Image: GETTY)


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The mortgage expert said: “If you’ve got cash in a savings account and it’s not earning much interest it could be more beneficial to offset it against your mortgage and reduce the amount of interest you pay.

“Depending on the total offset savings amount, your mortgage term could be cut by months or, even, years.

“Remortgage to make sure you are always on the best rate but try not to add big fees to your balance each time you do so.

“Some people switch deal every two years and with this may add £1,000 or £2,000 to their balance each time. A good broker will calculate whether this cost is worthwhile.


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“Repeatedly buying the best rate on the market may seem like a good idea, but the mortgage balance will sometimes reduce more slowly with this capital being added back on.”

Mr Hayes also shared his thoughts on choosing a mortgage term.

He said: “Overall, let your budget lead your term choice not the other way around. Thirty-five or even 40 year mortgage terms are becoming the default as they give consumers the lowest possible monthly premium.

“But you’ll pay back much more in the long run, so try to pay what you can afford, and you’ll become mortgage free sooner rather than later.”