While the current low interest rates have resulted in minimal savings returns, homeowners are also benefiting from some of the lowest mortgage rates ever seen. Rather than putting the extra cash at the end of each month into a savings account, borrowers may be better off paying it to the mortgage lender anyway.
By making over payments on your mortgage, you will pay less interest overall and reduce the balance quicker. For example: by overpaying £100 per month, on a 25 year mortgage of £150,000, the mortgage would be paid off 4 years earlier and save £18,000 in interest.
Most mortgage lenders will allow you to overpay up to 10% of the outstanding mortgage balance each year, but you should check with your lender first or you could face an early redemption charge.