According to research by Santander, assuming the average cost of a pint of lager at £4.81 and a £200,000 25-year mortgage at 4.5% interest, putting the price of just four pints into overpayments could save around £4,647 in interest over the life of a mortgage and take nine months off the borrower’s mortgage.
Overpaying £28 per month, equal to six pints of lager, could lead to an interest saving of £6,730 and take over a year off the mortgage.
The lender said that for the price of 20 or 30 pints of lager, standing at £96 and £144 respectively, approximately £20,432 or £28,373 could be saved in interest and between three and five years taken off the mortgage.
| Pints drunk per month | Cost (rounded down to nearest pound) | Interest saved over life of mortgage | Time taken off mortgage |
| 4 | £19 | £4,647 | Nine months |
| 6 | £28 | £6,730 | One year and one month |
| 12 | £57 | £12,983 | Two years and one month |
| 20 | £96 | £20,432 | Three years and four months |
| 30 | £144 | £28,373 | Four years and eight months |
(Source: Santander)
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The lender said that, in the first week of this year, it saw over £100m in mortgage overpayments.
Santander added that, in 2024, customers have overpaid a total of more than £2.2bn, noting that 30,000 more customers opted to overpay in 2024 compared to the prior year.
The bank said that it accepts overpayment from as little as £10, which, with a £200,000 mortgage, could save more than £2,490 in interest and take four months off a customer’s mortgage term.
Dry January is a challenge by Alcohol Change UK that was launched in 2013 and encourages participants to give up alcohol for the month of January. It started with 4,000 people taking part in 2013, which rose to 175,000 people in 2023.
Graham Sellar, head of intermediary channel for 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.”
This article was first published on YourMoney.com‘s sister site, Mortgage Solutions. Read: Homeowners could save thousands by using Dry January savings for mortgage overpayments
