There are often people who will say that you should repay your loans early. This is something that you might therefore be thinking about with regards to your mortgage. You may wonder whether it will be worthwhile repaying it early. There are advantages to doing this in some cases, but you need to consider any problems that you may have as well.

Early Redemption Fee

There are some mortgages which comes with an early redemption fee. This is a specific charge that will be made if you repay the mortgage early. The charge can vary a lot between lenders though. Sometime sit will just be a small amount to cover the admin costs of you repaying the mortgage. However, sometimes it can be a significant sum of money. This tends to be there to cover lost interest that the lender would have got had you kept borrowing from them and often it is there to discourage you from changing lenders. It is really important to take a look at how much this is and then you will be able to calculate whether it will be cheaper for you to repay the mortgage or not. Calculate how much interest you will save by repaying it early and compare that with the fee and then you will be able to look at which will be the best option for you. You might find this tricky to calculate but you might be able to get some help from your lender. Ask them to do a calculation of how much interest you will have to pay for the loan and how much you will have to pay if you repay it early. It isn’t an exact science though as interest rates could vary and so you cannot calculate exactly how much you will need to pay for interest, but you can make a decent estimate.

Saving Interest

Mortgages have interest charged on them and this has to be paid for monthly. Although the interest rate on mortgages can be small compared with some other types of borrowing, you will have to pay it for a long time. Normally a mortgage will last for twenty five years and so if you add up the cost of the interest that you have paid across all of those years, then you will find that it is a significant amount of money. It used to be the case, when interest rates were a lot higher that you paid for your home 2.5 times by the time you completed your mortgage. These days interest rates are significantly lower which means that we do end up paying less than this, but we will still save money if we pay it off earlier.


There are two possibilities with regards to stress in this situation. It might be that you do not like owing money and therefore repaying early will really help you and reduce your stress levels. Obviously, if you owe a lot, then it will not be repaid overnight but it can still help you to know that you are doing more towards repaying the mortgage. However, some people may find it stressful thinking about how they will manage to afford to repay more. They might find it hard to give up spending on non essentials so that they can afford to repay more off the mortgage. It is therefore worth bearing this in mind as well because we are all under a lot of stress at the moment and it is not a good idea to add to it as we could just make ourselves ill as well as unhappy. Therefore, think hard about what will be the best solution for you.