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Paying extra off your mortgage

If you have a variable-rate mortgage, you can reduce your mortgage (without any penalties) in two ways: 

  • Pay off a lump sum 
  • Pay more each month than the agreed amount

However, if you have a fixed rate mortgage, you may be charged a penalty if you want to pay extra money off your mortgage.

Pay off a lump sum

You can reduce your mortgage by making a single large payment off the amount you owe. This is called reducing the capital. Make sure you tell your mortgage lender that you want the lump sum to be paid off the capital. Paying a lump sum means that you will have:

  • lower monthly repayments or 
  • a shorter term so your mortgage is paid off sooner.

Either way, you will pay less interest over the term of the mortgage than before.

Pay more each month than the agreed amount
By increasing the amount you pay each month, you will pay your mortgage off faster and save money on interest.

For example, if you have 20 years left on a €200,000 mortgage with an APR of 4%, by paying an extra €100 each month, you would save over €11,000 in interest and reduce your mortgage term by over 2 years.

Use our additional mortgage repayments calculator to estimate the changes to your mortgage if you repay a lump sum or increase your monthly repayment amount.

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