How to Save Money on Your Mortgage: 7 Proven Strategies

Your mortgage is almost certainly your biggest monthly expense — typically 30–40% of take-home pay in the UK. That means saving money on your mortgage is the single highest-leverage financial move you can make. Shaving just £50/month off your payment through remortgaging, overpayments, or switching lenders adds up to £15,000+ over a 25-year term. This guide covers seven proven strategies that actually work, each with a real number attached.

Strategy 1: Remortgage to a Better Rate

When the Bank of England's base rate moves, your mortgage rate doesn't automatically adjust — unless you're on a variable deal. That's where remortgaging comes in.

Here's the math: if you borrowed £250,000 and are paying 5.8% over 25 years, your monthly payment is £1,503. Switch to 5.2% on the same terms, and you drop to £1,385. That's £118/month saved, or £1,416/year. Over a full remortgage term (typically 2–5 years), you're looking at £2,800–7,000 in pure savings — and remortgage fees are usually £500–1,500, so you break even in four months.

The trick: remortgage 3–4 weeks before your current deal ends. Lenders often have special rates available to existing customers, and you want time to lock in before rates shift. Use our mortgage calculator to compare your current deal against what's available today.

Strategy 2: Make Overpayments

This is the most powerful wealth-builder available on a mortgage, yet most people don't know they can do it.

An overpayment is extra money you pay toward your mortgage principal on top of your regular payment. Even £100/month extra knocks years off your term and saves tens of thousands in interest.

Take a £200,000 mortgage at 5% over 25 years:

Regular payment: £1,194/month
Total interest paid: £158,256
Add £100/month overpayment: you pay off the loan in 22 years instead of 25, saving £35,000 in interest

The earlier you start, the more dramatic the savings (this is compounding working in reverse — against interest instead of for it).

One caveat: some fixed-rate mortgages cap how much you can overpay annually (usually 10% of the loan balance) without triggering an early repayment charge (ERC). Check your mortgage deed or ask your lender. If you're on a tracker or variable rate, you can usually overpay freely.

Strategy 3: Shorten Your Mortgage Term at Remortgage

When you remortgage, you don't have to stick with the same term length.

Imagine you took out a 30-year mortgage, you're now five years in, and you'd like to pay it off faster. At your next remortgage, you can switch to a 20-year term instead of restarting another 25–30 years. Your monthly payment will be higher, but you'll save a fortune on interest — and own your home outright that much sooner.

The numbers: on a £200,000 mortgage at 5%:

25-year term: £1,194/month, £158,256 total interest
20-year term: £1,325/month, £118,000 total interest
Difference: £131/month more, but you save £40,256 in interest

This strategy works best if you're earning more than when you first got the mortgage or if your expenses have dropped (e.g., you've paid off a car loan or childcare costs have ended). Use our mortgage calculator to model different term lengths and see what your new payment would be.

Strategy 4: Lock in a Fixed Rate When Rates Are Stable

Fixed rates protect you from base rate rises. Yes, you might pay slightly more than a tracker or variable rate initially, but you know exactly what you'll pay for 2, 3, 5, or 10 years — no surprises.

If you're on a variable or tracker and rates are rising, fixing now is a sensible hedge. If you're already fixed, there's no urgent reason to switch unless a dramatically better rate becomes available (which would show up immediately when you compare mortgages).

The opposite move works too: if you've been fixed for 10 years at 3.5% and rates have dropped to 4.2%, you might stay fixed anyway — the cost of breaking the current deal could outweigh the savings. Always calculate the break-even before switching.

Strategy 5: Switch Lenders (Don't Just Remortgage With Your Current Bank)

Most people remortgage with their existing lender because it feels easy. That's often a mistake.

Here's why: your bank's "loyalty rate" for existing customers is sometimes worse than their rate for new customers coming through a broker or comparison site. If you've been with your lender for 10 years and your rate is average-to-poor, they're betting you won't bother to shop around.

Switching to a different lender entirely takes no longer than remortgaging with your current one — maybe an extra week of admin — but could save you £50–150/month. Over five years, that's £3,000–9,000.

Brokers are free (they take commission from the lender) and they can access deals not advertised directly. If broker fees are mentioned, they're usually rolled into your mortgage or covered by the lender. Compare mortgages on Which? MoneySuperMarket, or similar comparison sites accredited by the FCA.

Strategy 6: Understand Early Repayment Charges and Plan Around Them

Some mortgages have early repayment charges (ERCs) — penalties if you pay off the loan faster than contracted or switch before the rate ends.

ERCs are usually tiered: you might be charged 5% of the amount you repay in year 1, 4% in year 2, 3% in year 3, and so on. On a £200,000 mortgage, a 5% charge is £10,000 — brutal.

Before you throw extra money at your mortgage or remortgage early, calculate whether the savings outweigh the penalty. If you're looking to overpay, ask your lender for your ERC schedule. Many let you overpay up to 10% per year penalty-free. If you're tempted to remortgage early but there's an ERC, compare:

ERC cost + new deal's savings = net benefit

Often the net benefit is still positive — but not always.

Strategy 7: Bundle Other Debt Into Your Mortgage

This is controversial, but worth mentioning: some people consolidate credit cards or personal loans into their mortgage to lower their rate. Credit card debt at 18% vs mortgage debt at 5% is an enormous difference.

The trade-off: you're extending the repayment period (and thus paying interest longer), but you're also lowering the interest rate significantly. The math can work out, but you're also borrowing against your home, which carries risk if you can't pay.

Speak to a mortgage advisor before doing this — it's not a decision to make alone.

The Savings Add Up Fast

To illustrate how these strategies compound, imagine you:

Remortgage and save £100/month (strategy 1)
Add a £50/month overpayment (strategy 2)
Shorten your term by 3 years (strategy 3)

Total monthly saving: £150. Over 22 years, that's £39,600 in lower payments plus tens of thousands more in interest saved.

If you're in your 30s or 40s and buying or refinancing, these moves feel small month-to-month but transform your financial position by retirement.

Frequently Asked Questions

Q: How often should I check if I can remortgage? A: At least once a year, or whenever base rates move by 0.5% or more. If your current rate is more than 0.5–1% above current market rates, it's probably worth the admin of remortgaging.

Q: Will remortgaging hurt my credit score? A: A remortgage with the same lender is often just a rate change and doesn't trigger a new credit check. Switching lenders does, but the impact is small (15–20 points) and recovers within 3 months if you don't apply for other credit simultaneously.

Q: Can I remortgage if I'm on a variable rate? A: Yes, but check your mortgage deed for early repayment charges first. Variable mortgages sometimes have ERCs for the first few years. If there's no ERC, switching to a fixed rate is often a good move, especially if base rates are rising.

Q: What's the minimum overpayment most lenders allow? A: Typically £100–500 per month, or occasionally one lump sum per year. Check your offer document or call your lender to ask.

Q: If I overpay, can I get the money back? A: No. Overpayments are permanent reductions to your principal. If you face a financial emergency later, you can't "unwind" the overpayment — you'd need to remortgage or borrow elsewhere. Only overpay if you're confident the money is surplus.

Q: How much does it cost to remortgage? A: Typically £500–1,500 in lender fees (valuation, legal, application), though some lenders offer fee-free remortgages in exchange for a slightly higher rate. The break-even is usually 3–6 months of savings. Use our mortgage calculator to check whether the numbers make sense for you.

Q: If I'm in my 50s or 60s, is it too late to save on my mortgage? A: Not at all. If you have 10+ years left, remortgaging or overpayments still make a difference. If you have fewer than 10 years, the payback period is shorter, so the maths are tighter — but it's worth calculating.

Q: Should I use an equity release to pay off my mortgage? A: Not recommended. You'd be converting low-cost secured borrowing (mortgage) into high-cost secured borrowing (equity release). Focus on remortgaging and overpayments first.

Next Steps

Start by pulling your mortgage offer or deed and noting:

Your current rate and term end date
Whether there are early repayment charges (and the percentage)
Your outstanding balance and monthly payment

Then, use our mortgage calculator to compare what your payment would be at today's rates and terms. If you're paying significantly more than current rates would charge, remortgaging is worth exploring.

For a bigger-picture view, if you're in your 30s or trying to save aggressively on a tight budget, check out how to save money on a tight budget and how to save money on a low income — many people find that freeing up cash from their mortgage payment makes other savings goals easier to hit. And if you're using money-saving apps and tools to track spending, a remortgage is the fastest way to lower that mortgage-payment line item on your budget.

Your mortgage is almost certainly the biggest expense in your life. It's worth 30 minutes of research to see if you can save thousands.