Martin Lewis tells viewer how he could save a staggering £36,000

Martin Lewis urges viewers to look into mortgage overpayments

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The MoneySavingExpert founder said he’s often asked whether it’s better to overpay a mortgage rather than save, and said while there is no textbook answer, sometimes it can be worth considering. In some cases, the expert said it’s possible to make “monumental savings”.

Answering a question from Linda who called in to ask Martin Lewis if her son should overpay his mortgage, Martin said it depends on whether someone’s mortgage rate is higher than their savings rate.

On the show he explained: “Linda we talked about overpaying £20,000 – we can’t actually do that because that would be over 10 percent of your mortgage, so i’m going to go for £17,000 on an overpayment.

“Now the overpayment saving by doing that now on the very cheap mortgage rate that he has would be £5,500 compared to over the same period in savings he’d make £11,000 in interest in a savings account.

“So that’s because savings rates are about 2.5 percent easy access. I haven’t even gone to fixes that pay more and your mortgage rate is a lot lower at 1.1 percent.”

“But now let’s just do the calculation if he was on a five percent mortgage – which is what it would be when his fixed rate ends – then the overpayment saving is £36,000.

“£36,000 in interest alone saved by overpaying the mortgage.

“I would really advise those people who have savings and who are going onto higher rate mortgages – or are on a higher rate mortgage – go onto a mortgage overpayment calculator – do the calculation.

“Even if you can only overpay £50 a month – and you can do it as a monthly overpayment – you have to make sure it reduces the capital that you owe and they don’t just lower your future mortgage repayment. That can be a monumental saving – it’s worth checking.”

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Martin said the mortgage market could bounce back but it’s hard to tell without a crystal ball.

For those who are “risk averse” he suggested a fixed deal could be the best option as soe people’s mortgages are going to increase by a shocking amount.

On Good Morning Britain a couple of weeks ago he explained: “First of all because for every one percent your mortgage goes up you’re paying £600 a year more per £100,000 of mortgage.

“They’ve already gone up three percent compared to last year so that’s £1,800 – if it goes up another three percent that’s £3,600 a year per £100,000 of mortgage and many peoples’ mortgages are bigger.”

Thousand of mortgage deals have been pulled by banks and building societies over recent weeks.

Katie Brain, consumer banking expert at Defaqto said it has led many people to consider remortgaging early to secure a better deal as experts predict interest rates could hit six percent next year. recently asked mortgage adviser Daniel Knott to share his advice and knowledge with readers. 

Mr Knott added: “For some homeowners it will make clear sense to accept short term financial loss, to pay the early repayment charges to secure a rate now.

“However, whether this is the correct financial decision will depend upon the individual circumstances.

“Considerations include a homeowner’s current interest rate, early repayment charges, what other products are available to them right now, the date that their current deal ends and the anticipated rate rises.

“The tipping point as to whether remortgaging early is the correct decision financially will be different for everybody.

“A mortgage expert can complete calculations for you, of which will then allow you to make an informed and balanced decision.”

Martin Lewis is the Founder and Chair of To join the 13 million people who get his free Money Tips weekly email, go to

The Martin Lewis Money Show returns on ITV next Tuesday from 8pm.

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