How a bi-weekly mortgage payment hack can help you save up to £92,000
Want to slash years off your mortgage and save thousands of pounds? Simply switch to bi-weekly mortgage payments instead of monthly.
Read on to discover just how much this hack trims off your mortgage and total interest.
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Author - Helen Lovell
Last reviewed on 28th January 2025
Key statistics
The national average interest savings from making bi-weekly payments is £49,118.
On average, bi-weekly payments shorten the mortgage term by 4 years and 9 months.
Greater London has the largest financial savings with bi-weekly mortgage payments, reducing interest by £92,200 on an average house price of £511,279.
Regions with lower average house prices, like Northern Ireland (£168,791), still see significant savings (£30,440).
Making annual overpayments in the East of England and Yorkshire & The Humber can reduce mortgage terms by as much as 5 years and 3 months.
This bi-weekly mortgage hack could help you save up to £92,000
Did you know that switching to bi-weekly mortgage payments can help you save significantly on interest? By making smaller, more frequent payments every two weeks, you effectively make 13 full monthly payments each year instead of the typical 12. This strategic approach reduces the total interest you pay on your mortgage.
Curious to see how much you could save over the lifetime of your mortgage?
The table below illustrates potential interest savings for homeowners across different UK regions, based on average house prices and estimated bi-weekly payments*:
Region | Average House Price | Estimated Bi-Weekly Mortgage Payment | Interest Saved |
|---|---|---|---|
Greater London | £511,279 | £1,311.50 | £92,200 |
West Midlands | £377,822 | £969.50 | £68,150 |
South East | £339,560 | £871 | £61,230 |
East of England | £317,608 | £815 | £57,290 |
Yorkshire & The Humber | £254,912 | £654 | £45,970 |
South West | £248,561 | £637.50 | £44,820 |
North West | £226,627 | £581.50 | £40,880 |
East Midlands | £219,446 | £563 | £39,580 |
North East | £217,939 | £559 | £39,300 |
Scotland | £195,036 | £500.50 | £35,180 |
Wales | £190,553 | £489 | £34,370 |
Northern Ireland | £168,791 | £433 | £30,440 |
*Mortgage payments are calculated based on the average 2-year fixed-rate mortgage at 90% loan-to-value (LTV) across all lenders, using a rate of 5.54% and a 30-year mortgage term.
The bi-weekly mortgage payment strategy offers significant savings for UK homeowners across various regions. In Greater London, where the average house price is £511,279, homeowners could save a substantial £92,200 in interest by adopting this approach.
Mortgage borrowers in the West Midlands can save the second highest interest total with a predicted saving of £68,150. Those in the South East round up the top three following closely behind with a potential saving of £61,230.
Even in areas with lower property values, such as Northern Ireland (average house price £168,791), the potential savings remain impressive at £30,440. Given that the average cost of a holiday is £3,000 for a family of four, this is an extra 10 holidays over the lifetime of a mortgage.
Switching to bi-weekly payments can make you mortgage-free five years earlier
As well as saving thousands of pounds, switching to bi-weekly payments can make you mortgage-free earlier in life.
Let's take a closer look at how annual overpayments could transform mortgage terms across the UK:
Region | Average Mortgage Term | Annual Overpayment Amount | New Mortgage Term | Years Saved On Mortgage |
|---|---|---|---|---|
East of England | 31 years | £1,742 | 26 years, 9 months | 5 years, 3 months |
Yorkshire & The Humber | 31 years | £1,118 | 26 years, 9 months | 5 years, 3 months |
East Midlands | 30 years | £1,275 | 25 years | 5 years |
London | 30 years | £2,623 | 25 years | 5 years |
North West | 30 years | £1,163 | 25 years | 5 years |
South East | 30 years | £1,939 | 25 years | 5 years |
West Midlands | 30 years | £1,308 | 25 years | 5 years |
Northern Ireland | 30 years | £978 | 25 years | 5 years |
North East | 29 years | £866 | 24 years, 5 months | 4 years, 7 months |
South West | 29 years | £1,630 | 24 years, 5 months | 4 years, 7 months |
Wales | 28 years | £1,126 | 23 years, 9 months | 4 years, 3 months |
Scotland | 27 years | £1,001 | 23 years | 4 years |
The East of England and Yorkshire & The Humber showcase remarkable potential, saving an impressive 5 years and 3 months on their mortgage terms by overpaying by £1,742 throughout the year.
Next, London follows suit. Despite having the highest annual overpayment amount, overpaying by a total of £2,623 across the year will allow you to trim 5 full years off your mortgage duration.
Even Scotland, with its more modest mortgage terms, proves that savvy homeowners can accelerate their journey to mortgage freedom, taking approximately 4 years off their loan term.
What you should know about bi-weekly overpayments
As our research has shown, this simple approach can help homeowners reduce their total mortgage cost at a much quicker rate. However, it’s important to note that some mortgage lenders charge fees for overpaying. Rules vary by lender so it’s important to check your specific terms before making additional payments.
John Fraser-Tucker, Head of Mortgages at Mojo Mortgages said:
“Many lenders allow you to overpay up to 10% of your outstanding mortgage balance each year without penalties, but exceeding this can trigger early repayment charges. Each lender has its own rules, so it's crucial to check the terms of your mortgage before making any extra payments.
“Some lenders may require overpayments to be made through direct debit, and if their systems are set up to process payments only on a monthly basis, they might not be able to accommodate more flexible arrangements. That said, other lenders might offer more flexibility, so always speak with your lender first to understand what’s possible and avoid any surprises."
Regular overpayments, even in moderate amounts, can lead to a significant reduction in mortgage terms across the UK. However, these results will vary depending on individual circumstances, such as initial loan size, interest rates, and lender policies. This data shows the importance of understanding how overpayments could work in your specific situation to maximize potential savings.
5 key things to know before making mortgage overpayments
To help mortgage borrowers better understand if a bi-weekly payment is best for them, we’d recommend the following five considerations:
1. Check for early repayment charges
Some mortgage lenders impose early repayment charges if you overpay too much. To avoid penalties, check the terms of your mortgage agreement and limit overpayments to no more than 10% of the outstanding balance per year (or the specified cap in your contract).
2. Compare with savings account interest rates
Before deciding to overpay, consider the interest rate on your mortgage versus the interest rate you would earn by saving or investing. If your mortgage interest rate is higher than your savings account interest rate, overpaying could be a smarter financial move.
3. Check lender direct debit conditions
Before setting up a direct debit for regular overpayments, confirm with your lender that they allow this flexibility. Some lenders may impose limits or fees for setting up additional payments through direct debit, so understanding their policies in advance can help you avoid unnecessary charges.
4. Understand exactly how overpayments are applied
Make sure you understand how your lender applies overpayments. Typically, overpayments can either go toward reducing the loan balance or shortening the loan term. Clarifying this can help you tailor your strategy to pay off the mortgage faster or reduce monthly payments, depending on your goals.
5. Consider the impact on future borrowing
Overpaying your mortgage may affect your ability to borrow in the future. Some lenders consider your available equity when assessing your eligibility for future loans. It’s important to consider your overall financial plans and whether it’s better to keep some cash flow available for other financial needs or investments.
If your remortgage date is approaching, now’s the perfect time to explore how you can save on interest with Mojo Mortgages.
Our expert mortgage advisors can guide you through your remortgage options and, if you're thinking about making mortgage overpayments, help you navigate your lender’s specific terms.
Let us guide you to the best strategy for paying off your mortgage faster and saving money in the process.
Methodology
The average house price
We gathered data on the average house price for each UK region, using the most recent figures from the Land Registry (November 2024).
Bi-weekly mortgage payment
This was calculated based on the average 2-year fixed-rate mortgage at 90% LTV, with an interest rate of 5.54% and a 30-year term across all lenders (as of January 16, 2025)
Annual overpayment amount
We determined this by comparing the total amount paid with 12 monthly payments versus 13 payments per year across each UK region.
Total interest saved and years saved on mortgage
Using MoneySavingExpert's mortgage overpayment calculator, we adjusted the loan amount and term for each region, setting a recurring annual overpayment with an interest rate of 5.54% to estimate the total interest and time saved on the mortgage.
Savings depend on individual circumstances, including house price, loan size, and lender policies.