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Mortgage overpayment reserve

An overpayment reserve is what you create when you overpay your mortgage. It’s mostly used to reduce the amount of interest you pay on your balance. You can also use it for other benefits, depending on your mortgage deal.

How an overpayment reserve works

When you make overpayments on your mortgage, the extra amount is used to reduce your mortgage balance. This helps lower the amount of interest charged over time. We keep a record of these overpayments as an overpayment reserve.

Depending on when you took out your current mortgage deal, this reserve could allow you to:

  • pay off your mortgage earlier
  • underpay on your mortgage
  • borrow back the overpaid amount, if your mortgage was taken out before March 2010 and meets the eligibility criteria

The overpayment reserve and your Loan to Value

When borrowing more, the overpayment reserve is also used in our calculations for working out your Loan To Value (LTV).

For example, the mortgage balance on your account says £90,000. This includes an overpayment reserve of £10,000. So we recognise your balance to be £100,000.

We do this because we could allow you to underpay or borrow back the £10,000 you’ve overpaid at any time. This depends on your mortgage deal terms and conditions.

Information:

The Loan to Value (LTV) is the percentage of borrowing you take out against your home.

For example, if you have a mortgage of £150,000 and your home is worth £200,000, you have an LTV of 75%. 

Note:

Some of our mortgages have limits, known as an overpayment allowance, on how much you can overpay.

Find out more about overpayments

What is value of your overpayment reserve?

You can see the value of your overpayment reserve by logging in to Mortgage Manager. You can also check your overpayment allowance.

View your overpayment reserve in Mortgage Manager

You will need to be registered for our internet bank or banking app to access Mortgage Manager.

To register, tap or click the log in button below and select ‘Register Now’ in the top right corner to get started.

If you are already using our Internet Bank, after logging in, follow these steps:

  1. Select your mortgage account 
  2. Go to the Related services menu on the left-hand side and select Manage your mortgage.
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Still need help?

Contact us

To discuss the impact of giving up your overpayment reserve, call us

Monday to Friday, 8am to 6pm.
Saturday 8.30am to 4pm.
Closed Sundays and bank holidays.

UK: 0345 609 25 31