It seems diverting the cost of just four pints per week into overpaying your mortgage could save a typical homeowner nearly £13,000 in interest and knock two years off the term.
This is according to calculations by mortgage lender Santander, which is hailing the benefits of overpaying – even by a small amount – on your mortgage.
In fact, it said, committing as little as £10 a month could make a massive difference to how much interest you pay over time on your home loan – lessening the cost over time.
Here’s how it crunched its numbers. Santander looked at statistics from the Office for National Statistics (ONS) to ascertain the average cost of a pint of lager was £4.81.
It then factored in that a homeowner putting the monthly price of twelve pints (£57) towards overpaying a 25-year mortgage of £200,000 at 4.5% over the life of the mortgage, would save £12,983 in interest.
And, as well as enjoying the health benefits of being booze-free, this person could also be mortgage-free two years and one month earlier than planned, said Santander. Now that’s something to help keep you motivated during Dry January.
For those who commit more money to booze in a month, the potential savings are even greater, the mortgage lender found. Overpaying £144, the average price of thirty monthly pints, towards the same mortgage would save £28,373 in interest and reduce the term by four years and eight months, it said.
For those who just put aside £10 a month into overpaying – the minimum overpayment Santander accepts – there is a still a significant financial benefit. On a £200,000 mortgage, this would save more than £2,490 in interest and shave four months off a customer’s mortgage term.
Graham Sellar, head of intermediary channel – mortgages, at Santander, said: “Whatever the reason for doing Dry January, there’s an undisputable benefit to your bank account.
“It’s tempting to spend that extra cash, but for those able to put even a small proportion of it aside, starting a habit of overpaying on your mortgage could reap huge benefits in the long run.”
How to make an overpayment
Santander customers can make one-off lump sum or regular monthly overpayments using the bank’s online banking and mobile app. In 2024, Santander customers overpaid a total of more than £2.2 billion, with 30,000 more customers opting to overpay in 2024, than in 2023.
In the first few days of January 2025, Santander saw £100 million of mortgage overpayments being made by customers.
You can use Santander’s mortgage overpayment calculator to find out more about your own repayments.
