The 2 rule is sometimes used informally to describe making one extra mortgage payment each year or consistently rounding up monthly payments. Small, regular overpayments reduce the capital balance faster, which in turn lowers the total interest charged over the life of the mortgage.
Some borrowers choose to split monthly payments into two smaller instalments, although the benefit depends on how the lender calculates daily interest. Confirming your lender’s overpayment allowance is important to avoid early repayment charges.
Over time, steady and disciplined overpayments can significantly reduce the mortgage term. A planned approach tends to deliver better results than occasional larger payments made without structure.
Your home may be repossessed if you do not keep up repayments on your mortgage.