'Tweak' to mortgage 'could save £15,000 interest and pay it off early'

A finance expert has revealed a savvy tip that could potentially knock years off your mortgage and save you a fortune in interest, without the need to remortgage or dig deeper into your pockets. Aaron Peake, a personal finance expert at credit score firm CredAbility, suggests homeowners should rethink their repayment frequency.

Peake advises: "Most people stick to monthly mortgage payments, usually because they think that's the only option. But switching to bi-weekly payments – that's one payment every two weeks – could help speed things up. It means that instead of making 12 mortgage payments, you actually make 26 half-payments, or 13 full ones. That extra payment reduces your balance quicker, so you pay less interest and finish your mortgage earlier.

"For example, if you have a £200,000 mortgage at 5% interest over 25 years, switching to bi-weekly payments could save you more than £15,000 in interest, and you could be mortgage-free about four years earlier. That's without increasing your payments, just splitting them differently. Most UK lenders calculate interest daily, so every time you make a payment, your outstanding balance goes down, and less interest gets added."

"The most important thing is to check with your lender first," Aaron stressed. "You need to know that they'll accept payments this way, apply them correctly, and won't charge you any late payment fees or penalties. Some lenders offer a bi-weekly payment plan, while others might allow you to set it up yourself by creating a standing order or bank transfer every two weeks.

"Just make sure the full monthly amount has been paid by the due date. It's also worth checking whether your lender allows overpayments - most do. Under current rules, you can usually overpay up to 10% of your outstanding balance each year without any fees, but it's worth confirming."

Aaron then outlined three additional strategies to save on your mortgage:

Maximise the benefit of overpayments: "If your budget allows, adding extra payments here and there - say £50 or £100 a month - can really chip away at the interest you're charged. Use a mortgage overpayment calculator online to see the long-term impact. It's surprising how much it adds up."

Synchronise payments with income schedule: "Lots of people are paid every two weeks or every four weeks, not monthly. By aligning your mortgage payments with when money comes in, it's often easier to budget and you might find you're able to manage bi-weekly payments more comfortably than you thought."

Be smart with windfalls: "If you get a tax refund, work bonus, or even a generous birthday gift, consider putting some or all of it towards your mortgage. Even one-off lump sums can reduce your balance, cut your interest, and shorten the length of your loan."