First-time buyer mortgage overpayments: How to be mortgage-free earlier

Key findings:

• 68% of UK first-time buyers are making mortgage overpayments

• Average first-time buyer age is 31, leading many to seek earlier mortgage freedom

• Most common overpayment amounts range from £200-£399 monthly

• South-East and Scotland lead in early mortgage completions

With the average first-time buyer age now at 31, many are looking for ways to avoid paying mortgages into their 60s. New research from TSB bank reveals surprising strategies UK buyers are using to achieve mortgage freedom earlier.  For more insights, see our latest first-time buyer news and updates.

When you're setting out on the road to home-ownership, you might have stayed in the parental home while you built up the necessary funds for a deposit for a favourable mortgage product. Or you might have decided that you wanted your independence sooner and taken up the option of renting a place before plunging into the world of finding your first home to buy.

Whatever the reasons for your decision to buy your first home, research by the TSB Bank shows that the average age for a first-time buyer coming to the market is 31 (for the third quarter of 2025). The survey (performed for TSB by Censuswide covering over 1,000 first-time buyers with recent home purchases) showed the average age of the pool consulted was 30 years.

What this tells us is that first-time buyers are comparatively late in the homebuying process, which means that the terms of the mortgage could mean they would still be paying off the loan into their sixties at the point that most people would be thinking of planning for their retirement.

What are the options? If you are a first-time buyer just starting out on the property ladder or are thinking of remortgaging to a more beneficial mortgage product, you might be thinking of overpaying the mortgage each month (assuming the terms of the loan support such an action) as a way of bringing that end date in further so that you become mortgage-free earlier than the stipulated date established when you signed up for it.

Indeed, just over one in six of the first-time buyers taking part in the survey, who have bought a property in the last five years, have hopes of becoming mortgage-free by the time they reach the age of 40.

Perhaps this is too ambitious for some first-time buyers, but the survey also shows that just over two-thirds (68%) of those first-time buyers are making mortgage payments to bring that end date and the goal of being mortgage free earlier in their lives.

Even if those who are not stampeding so quickly towards such an early target, 57% of first-time buyers are planning to cut some of the time out of the length of their mortgages. Interestingly, in thinking about avoidance of paying the mortgage into their later lives when they are hoping to retire, 68% of those polled have prioritised becoming mortgage free over boosting their pension pots, which was only of interest to 25%.

There are regional differences, too, with the South-East and Scotland having the most early mortgage completions, and East Anglia (at 4%) and Wales (5%) having the fewest.

Unless you have a highly-paid job, such plans will necessarily come with sacrifices elsewhere in your life. The survey showed that, in order to meet their mortgage-free plans:

• 20% of first-time buyers highlighted an ambition to make overpayments of between £200 and £299 each time
• 17% were planning to pay an extra £300 to £399 each time
• 9% planning to make a lump sum payment of between £1,000 to £2,499 to enable them to get ahead on their mortgage

To manage these plans, first-time buyers are taking various approaches:

• 57% stated that they were planning (or are) saving more
• 55% were planning to tighten their belts and budget more strictly
• 29% were taking on a second job
• 29% had decided not to go on holidays or spend out on other lifestyle luxuries
• 18% had decided to reduce their current pension contributions

Practical tips for first-time buyers considering overpayments:

• Check your mortgage terms for overpayment limits 
• Use an overpayment calculator to see potential savings
• Consider starting with small, regular overpayments
• Review annually as your income changes

But not everyone can afford to take these decisions, either financially or personally, which is shown in the factors identified for the third of respondents who would not be taking steps to overpay their mortgage:

• Affordability - the main barrier (47%)
• Preferring to keep a financial safety buffer (28%)
• Saving for a family (22%)
• Job security concerns (19%)
• Prioritising the lifestyle now (e.g. holidays) (18%)

As Craig Calder, Director of Mortgages at TSB, notes of the survey's findings:

"Recent first-time buyers are prioritising overpayments over building up savings, pension contributions, and holidays, in the hope of becoming mortgage free earlier in life.

"Overpaying can be a great way of shaving years off your mortgage, and we'd advise building this into your wider financial plan that ensures money confidence across savings, budgeting and a pension."

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