Mum Aims to Save £20,000 and Shorten Mortgage with Free App
A mother-of-two is on course to save £20,000 and cut three years off her mortgage by leveraging a free financial app. Eleanor and her husband recently upgraded to a larger home, but instead of feeling daunted by the increased mortgage, they embraced a strategy of making regular overpayments.
How Sprive App Facilitates Mortgage Overpayments
Eleanor began using Sprive in 2022, during a period of rapidly rising interest rates, while she was still on a lower-rate mortgage. Sprive is an app that links to your bank account to monitor spending, helping users set aside affordable amounts for mortgage overpayments. It allows you to define minimum and maximum payment limits to avoid early repayment charges.
Most lenders permit overpayments of up to 10% of the outstanding balance annually without fees, though this varies, so it's crucial to review your mortgage terms. Sprive also offers a feature where users can buy gift cards from retailers like Tesco and M&S, earning cashback that is automatically added to the Sprive account for mortgage overpayments.
Eleanor's Practical Approach to Savings
Eleanor primarily uses Sprive for grocery shopping, purchasing £200 gift cards at the start and middle of each month for Tesco and M&S. She explained, "It means I always have one ready and waiting - especially helpful when doing a food shop with two young kids in tow." She also utilised the app for Christmas shopping at retailers such as B&M and Primark.
These consistent, manageable habits have put Eleanor on track to reduce her mortgage term by three years and save £20,000 in interest. She added, "Once we’re no longer paying extortionate nursery fees, our goal is to overpay as much as possible and cut even more off the term and interest to get mortgage free even sooner."
Key Considerations for Mortgage Overpayments
Sprive is free to use and compatible with major lenders including HSBC, Lloyds, Barclays, Santander, and others, and is regulated by the Financial Conduct Authority (FCA). While overpayments can lead to significant long-term savings, it's important to consider other financial priorities. Experts advise clearing expensive debts first and maintaining an emergency fund of three to six months' essential outgoings. Additionally, ensure overpayments reduce the principal debt rather than just lowering monthly payments.
