UK Finance figures estimate that there will be 1.6 million borrowers coming off fixed rates for the whole of 2025 and 900,000 in the second half of the year.
Recent Barclays figures also show that over a quarter of UK mortgage holders have remortgaged or will be due to remortgage this year. Consequently, a fifth said they would make overpayments on their outstanding balance in an effort to reduce their interest payment.
Sonya Matharu-Coxill, founder and adviser at The Mortgage Atelier, said mortgage overpayments have become a “much bigger part of the conversation over recent years”, especially for clients coming off ultra-low fixed rates.
Moneyfacts figures show that the lowest five-year fixed rates in 2021 were around 0.91%, with the average five-year fixed rate for the year being 2.55%. Coming forward to 2025, the average five-year fixed rate is 5.13%.
She continued: “Some are using their allowance now to reduce the balance before they remortgage. Others are exploring lump sum reductions in the future to help manage monthly payments.
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“Whether it’s to improve their loan to value, access better rates, or simply regain a sense of control, the focus has shifted. A few years ago, I would be the one raising overpayments as an option. Now, clients are coming in already thinking about it, which says a lot about how people are adapting to this market.”
Matharu-Coxill added that it was “important to consider the intention behind an overpayment”.
“Whether the goal is to reduce the mortgage term, lower monthly repayments, or improve the LTV for a future remortgage, the reasoning should guide the strategy.
“Equally, borrowers should be mindful that once funds are committed to the mortgage, they are no longer tangible. Overpayments should never compromise financial resilience – maintaining a sufficient emergency buffer remains essential,” she noted.
Mortgage overpayments not a quick fix
Ceri Evans, director at Remoo, said mortgage overpayments were a “classic example of the theory versus reality”.
“Yes, overpayments will reduce the overall amount of interest you’re paying; it’s a great strategy to reduce your term if you can commit to making regular overpayments over the course of years rather than a couple of months.
“The reality is unless you’ve been making consistent overpayment[s] over the term of the deal you’re currently on, making a handful of overpayments now isn’t going to help you get used to or save you anything significant in terms of making your new monthly payments lower,” he said.
Evans noted that the “more practical advice” would be for clients to “look at the whole of their outgoings and see where they can save on their monthly expenditure to help mitigate the impact of moving to a higher rate”.
“If this isn’t possible, then extending the term of the mortgage may be an option, on the understanding that client[s] will pay more in interest over [the] longer term. In extreme situations, switching part or all of the mortgage to interest-only should also be considered,” he said.
The latest figures from the Financial Conduct Authority (FCA) show that between July 2023 and July 2025, the monthly payments on around 278,000 mortgages were reduced as people switched to temporarily paying interest-only or extended their mortgage term. This is equal to around 3.1% of regulated mortgage contracts.
Mortgage overpayments can work but can be ‘easier said than done’
David Hollingworth, associate director of communications at L&C Mortgages, said the “turbulence of interest rate movement” had led to higher rates and monthly payments, but many had been “protected from the jump in costs” as they took a five-year fixed rate at the trough of fixed rate pricing.
He continued: “It would be easy to ignore the harsh reality of rate rises when the impact seems some way off and other living costs were also rising. I’ve been a strong advocate for borrowers to consider whether they could squeeze even more value out of those low payments and consider overpaying or putting aside funds that could later be used to reduce the mortgage.
“With savings rates potentially higher than the mortgage rate even after any tax, it could make sense to be building a pot that could then be used to cut the mortgage balance when the rate comes to an end.”
He added that the alternative of overpaying each month “helps to chip away at the capital balance” and would help households acclimatise to higher mortgage repayments.
“Coming to the end of a super-low rate will still be hard, but having a smaller mortgage to deal with should help. It would be easy to get carried away with the concept of overpaying and it’s important that borrowers still maintain an emergency fund, as it’s not straightforward to regain access to overpayments in most cases.
“That could put offset into the spotlight as a way that borrowers can build a cash savings pot, reduce the interest on the mortgage without having to give up access to those funds in case required further down the line. Unfortunately, there’s far fewer offset deals on offer at a time when they could really play a part for more borrowers’ plans,” Hollingworth said.
According to Criteria Brain, there are only four lenders out of 85 listed that offer offset mortgages on residential properties.
Hollingworth said overpayment strategies “make sense for the right circumstances”, but this can “still be easier said than done”.
“Borrowers are often interested in having an ability to overpay; it’s not always something that they get round to doing,” he said.
Mortgage overpayment terms and allowances crucial to check
Carmen Green, director and mortgage and protection adviser at Xpress Mortgages, said she would recommend mortgage overpayments to borrowers, but the focus tended to be around budgeting.
“Often, the discussion will lead to setting a comfortable or more cautious budget for the mortgage payments, with the option to make overpayments with any leftover funds at the end of the month. We can then look to reduce the mortgage term at the next review once settled in.
“It can also be a useful method for the self-employed or those with high variable income types (overtime/commission/bonuses), where monthly income varies or the portion of guaranteed income is low,” she said.
Green said some lenders give the option of making an overpayment via a standing order, which keeps it within the borrower’s power to cancel or reduce the standing order overpayment if needed, but doesn’t require any extra effort to make an ad hoc payment each month.
“Each mortgage will have different terms and conditions around overpayments; I would always recommend checking the specific mortgage terms and conditions for any overpayment allowance caps, early repayment charges, allowable methods of payment, and to understand how an overpayment is treated against the mortgage balance,” she said.
Criteria Brain shows that the vast majority of lenders offer 10% and 20% overpayment facilities as standard, with 57 lenders offering the former and six lenders offering the latter. Only seven lenders offer between 50% and 100% overpayment facilities as an option and five permit a fixed amount that is not percentage-based.
Green said if making overpayments is the plan, it was crucial to talk about it with a mortgage adviser to ensure the product allows more than the typical overpayment allowance or even consider an offset mortgage.
The demand for product flexibility is high, with Barclays figures showing that 41% of UK mortgage holders would like more flexibility in their mortgage products, such as payment holidays or overpayment options.
“I would also recommend saving an ‘emergency’ fund pot first, especially for homebuyers or homemovers who have just used up all their savings for their deposit. Having easily accessible funds for other unexpected costs is really important too.
“Overpayments is a great way to reduce the amount of interest paid and pay the mortgage off as quickly as possible, whilst retaining the flexibility of having comfortable mortgage payments in case of unexpected change in circumstances,” she said.
