Homeowners could save nearly £13,000 in interest and reduce their mortgage term by two years by redirecting their Dry January savings into mortgage payments, Santander has revealed.
The bank’s calculations show that putting the cost of just four weekly pints towards mortgage payments could lead to substantial long-term savings.
According to statistics from ONS, the average pint of lager costing £4.81. Redirecting the monthly cost of 12 pints (£57) towards a £200,000 mortgage over 25 years at 4.5 per cent interest would result in being mortgage-free two years and one month earlier than planned.
Santander has reported nearly £97million in mortgage overpayments during the first week of January 2025 alone. This follows a strong trend from 2024, when Santander customers collectively overpaid £2.2billion on their mortgages.
Heavier drinkers could reduce their mortgage term by four years and eight months
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The bank saw 30,000 more customers choosing to make overpayments in 2024 compared to the previous year.
The surge in early January overpayments coincides with the annual reset of Early Repayment Charges, allowing customers to make fresh overpayments without penalties.
For heavier drinkers, the potential savings increase significantly. Those cutting back 30 pints monthly could save £28,373 in interest and reduce their mortgage term by four years and eight months.
Even modest reductions can make an impact. Cutting back just four pints monthly would save £4,647 and reduce the mortgage term by nine months.
Those reducing their intake by 20 pints per month could save £20,432 and cut their mortgage term by three years and four months.
Santander accepts overpayments from as little as £10 per month, which on a £200,000 mortgage would save more than £2,490 in interest and reduce the term by four months.
Graham Sellar, Head of Intermediary Channel – Mortgages, at Santander, said: “Whatever the reason for doing Dry January, there’s an indisputable 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.”
Santander has made it straightforward for customers to contribute additional payments towards their mortgages through digital channels.
Customers can set up regular monthly overpayments or make one-off lump sum payments using either the bank’s online banking platform or mobile app.
The bank’s digital payment options have proven popular, contributing to the significant £2.2bn in overpayments made by customers throughout 2024.
These overpayment facilities are available to all Santander mortgage customers looking to convert their Dry January savings into long-term mortgage reductions.
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