Mathematically: a lump sum saves more interest because the balance drops sooner. In practice, regular monthly overpayments are easier to commit to and usually win. Here's the honest comparison.
You'll be mortgage-free 6 years 9 months earlier
and save £46,940 in interest.
| Without | With overpay | |
|---|---|---|
| Term | 25 years | 18 years 3 months |
| Total interest | £156,277 | £109,338 |
| You save | £46,940 · 6y 9m |
A lower interest rate could save you thousands more on top. See if you could remortgage to a better deal.
We may receive a commission if you remortgage through a partner broker. This never affects the rate you're offered.
Mortgage interest is calculated daily (or sometimes monthly) on the outstanding balance. A £6,000 lump sum on day one shrinks the balance for every single subsequent day — that's a lot of interest avoided.
Spreading the same £6,000 across the year as £500/month means the first month's £500 saves 12 months of interest, the second £500 saves 11 months, and so on. The total interest saved over one year is roughly half what the lump sum saves in that same year.
Most people don't have a £6,000 lump sum lying around — but they can afford £500/month. Setting up a standing order means it just happens, every month, alongside your normal Direct Debit.
Over a 20–25 year term the gap between 'lump sum on day 1 each year' and 'spread monthly' shrinks. Both massively beat doing nothing.
Most UK lenders cap fee-free overpayments at 10% per year. If you're paying close to the cap, time matters — overpaying in January gives you a full year of interest saving on that money, vs overpaying in December.
Important: This article is for general information and is not financial advice. Always speak to a qualified UK mortgage adviser before making decisions about overpayments, remortgaging, or your specific mortgage product.