The instinct to pay off your mortgage fast is strong. And often it is the right call. But overpaying is not always optimal, and understanding the trade-offs helps you make a genuinely informed decision.\n\nHow Overpayments Work — Extra money reduces your outstanding balance. Less interest accrues, so more of each payment goes toward capital. On a 200,000 mortgage at 5% over 25 years, overpaying by 100 per month saves approximately 26,000 in total interest and clears the mortgage 4 years 7 months early.\n\nThe 10% Allowance — Most fixed-rate mortgages allow up to 10% of the outstanding balance per year without early repayment charges. On 200,000, that is up to 20,000 per year. Exceeding this triggers ERCs that can wipe out savings.\n\nWhen Overpaying Beats Saving — Compare your mortgage rate against after-tax savings returns. At 5% mortgage and 3.2% after-tax savings, overpaying gives the guaranteed higher return. For higher-rate taxpayers, the gap is even wider.\n\nWhen Saving Beats Overpaying — If savings rates exceed your mortgage rate after tax. Also prioritise savings if you lack an emergency fund — overpayments are locked away and cannot be accessed in a crisis unless you have an offset mortgage.\n\nWhen Investing Beats Both — Equities have historically returned 7% to 10% per year. But returns are not guaranteed and fluctuate. Mortgage overpayment gives a guaranteed, risk-free return equal to your interest rate.\n\nThe Offset Alternative — An offset mortgage lets you hold accessible savings that reduce mortgage interest without reducing the balance. You earn no interest on savings but pay no tax either. Slightly higher rate than standard deals.\n\nOptimal Strategy — Build emergency fund first. Pay off higher-rate debts. Max out ISA and pension tax benefits. Then overpay your mortgage with whatever remains.