When it comes to mortgages, most of us are on autopilot. We sign the papers, set up the monthly direct debit, and carry on with life. But what if I told you that a simple change in how often you make payments could save you thousands of pounds and help you become mortgage-free years earlier?<h3 id="26a0864a-2938-43ea-be84-f72e1c62269f" data-toc-id="26a0864a-2938-43ea-be84-f72e1c62269f">The magic of fortnightly payments</h3>Here’s the simple maths. There are 52 weeks in a year. By paying your mortgage every two weeks (fortnightly), you end up making 26 half-payments instead of 12 full monthly payments.Those 26 half-payments actually add up to 13 full monthly payments in a year, meaning you sneak in an extra payment without much effort.This extra payment goes straight to reducing your loan principal, which then lowers the total interest charged over time and speeds up your repayment.<h3 id="51badf22-e178-4e10-a156-909ef922c030" data-toc-id="51badf22-e178-4e10-a156-909ef922c030">Let’s break it down with an example</h3>Imagine you buy a home for £300,000 on a 30-year mortgage. Under a traditional monthly repayment plan, it would take the full 30 years to pay it off.Switch to fortnightly payments, and you could potentially pay off your mortgage about 7 years earlier, saving tens of thousands in interest.That means more freedom, less financial stress, and more room in your budget to focus on other dreams and goals.<h3 id="bce085dc-5eb5-49f5-ac80-1f313b6f6b55" data-toc-id="bce085dc-5eb5-49f5-ac80-1f313b6f6b55">Important: Check with your lender first</h3>While this strategy sounds fantastic (and it can be!), there are some important details to consider in the UK:<ul><li>Overpayment limits: Many UK lenders allow you to overpay up to 10% of your outstanding balance per year without facing penalties. Paying more than this might trigger an early repayment charge (ERC), so it’s vital to check your limit.</li><li>How payments are applied: Most UK mortgages are set up for monthly payments. Some lenders may just hold your extra payments and apply them as a lump sum at the end of the month rather than immediately reducing your balance. In this case, the fortnightly method won’t have the same effect as intended.</li><li>Alternative options: Instead of setting up fortnightly payments, you might find it simpler (and lender-friendly) to make one extra lump sum payment per year or set up ad-hoc overpayments directly to the principal.</li></ul>A quick call to your lender can clear up how they handle extra payments and what’s possible within your mortgage terms. It’s always better to clarify first than get surprised by unexpected fees.<h3 id="133bf5cc-76ac-4887-9521-d6ed0888e9c3" data-toc-id="133bf5cc-76ac-4887-9521-d6ed0888e9c3">Should you pay off your mortgage early or invest instead?</h3>This is where it gets interesting. While paying down your mortgage faster means less debt and interest, some people wonder: What if I invest that extra money instead?The stock market, for example, has historically offered higher average returns than most mortgage interest rates. So some homeowners choose to invest extra cash in a stocks &amp; shares ISA, a pension, or other investment vehicles, aiming for long-term growth.Here’s a simple way to think it through:<ul><li>Peace of mind first: Becoming mortgage-free early feels empowering and gives you more financial security.</li><li>Growth potential: If you’re comfortable with risk and want to potentially build wealth faster, investing could work better for you.</li><li>Balanced approach: Many people choose to overpay a bit on the mortgage and also invest, getting the best of both worlds.</li></ul>Whatever you opt for, make sure you’re clear on you <h3 id="b107fe5b-de83-4ed7-9cef-4ba9e9543bf5" data-toc-id="b107fe5b-de83-4ed7-9cef-4ba9e9543bf5">The bottom line</h3>Switching to fortnightly mortgage payments can be a clever, simple way to save money and pay off your home faster. But before leaping, check your lender’s rules on overpayments and ensure they fit your broader financial picture.Once you get into the habit of paying extra, you’ll feel more in control of your money, and you can then explore whether paying off more or investing works best for your future goals.And speaking of taking more control of your money, check out my latest book, <a target="" rel="noopener noreferrer" href="https://amzn.to/3ILCm9n">Winning The Money Game, Money lessons you can’t afford to ignore</a>, where I explore a range of money topics, including investing and managing your personal finances, whether you’re a working professional or a business owner.RememberIn addition to providing accounting and tax services to business owners, I host periodic workshops covering a range of financial topics to help you stay informed and empowered. Suppose you’re feeling overwhelmed or unsure about your financial journey &amp; would like to consider personalised financial coaching. In that case, I provide the support, guidance, and educational tools you need to achieve your financial goals with confidence. Full information for 1:1 coaching or group workshops is updated <a target="_blank" href="https://linktr.ee/SalomeRu">here</a>.Contact: <a target="_blank" href="mailto:hello@salomeru.com">hello@salomeru.com</a>

Did You Know? How Paying Your Mortgage Every Two Weeks Could Save You Thousands...And What to Consider Next

How Paying Your Mortgage Every Two Weeks Could Save You Thousands

Should you pay off your mortgage early or invest instead?

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How Paying Your Mortgage Every Two Weeks Could Save You Thousands

How Paying Your Mortgage Every Two Weeks Could Save You Thousands

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