Although 25-year mortgages have become the norm, it can make sense to pay off your mortgage as soon as possible. And some lenders now actively help you to do this and save you substantial amounts of money.

To understand the advantages of making capital repayments - or overpayments - on your mortgage you have to remember how a mortgage works. Your mortgage debt is made up of the capital you borrowed from the lender to buy your home and the interest the lender charges for allowing you to borrow the money. The interest is charged on the amount of capital you owe and therefore if you make capital repayments on top of your monthly mortgage repayments you save money because you owe less.

Some of the more flexible lenders have launched mortgage schemes which allow you to make overpayments without penalising you for doing so. Most will calculate the interest you owe on a daily basis so any overpayment is assigned to the mortgage immediately and the amount of interest you owe reduces straight away.

What's more, some lenders have gone even further along the flexible route and allow you to reclaim any extra money you have paid in. You can reduce or increase the outstanding mortgage as your financial needs dictate. This is obviously very good news if you need to get hold of some money urgently.

Some lenders offer offset and current account mortgages (CAM) which allow you to run your mortgage alongside your other finances. If you offset your savings and/or current account with your mortgage you only pay interest on your mortgage balance minus the money you have in your savings and/or current account. Therefore you don’t pay as much interest as you would normally. Depending on the lender, you can use this flexibility to pay off your mortgage early, take payment breaks or underpay if you need to.

CAMs work like normal current accounts, with a chequebook and debit card. The borrower’s salary is paid into the CAM. The main difference between the offset mortgage and CAM is that the offset loan will keep your savings separate from your mortgage, everything is combined with the CAM.

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