If you've got a bit left over each month, well done. That's not easy right now. Putting it on your mortgage can feel like the grown-up, responsible thing to do. But if you also have a credit card, overdraft or loan, that money usually works much harder somewhere else.
This guide shows how to compare them, what the difference looks like in pounds, and when the mortgage really should come first.
The short answer
Put spare money on whichever debt charges the highest interest rate, as long as you're making at least the minimum payment on everything. For most people, that's not the mortgage.
The Bank of England's figures for August 2026 put the average rate on interest-charging credit cards at 21.55%, against about 4.60% on new mortgages. Arranged overdrafts at the big banks are often around 40%.
What £1,000 costs you for a year
Debt | Typical rate | Interest on £1,000 over a year |
|---|---|---|
Mortgage | 4.60% | about £47 |
Credit card | 21.55% | about £238 |
Overdraft | 39.9% EAR | about £399 |
So £1,000 off a typical credit card saves about five times as much interest as £1,000 off the mortgage. Off an overdraft, it's more than eight times.
A worked example
Sam has a £180,000 mortgage at 4.6% with 20 years left (about £1,149 a month), and a £4,000 credit card at 21.55%, paying £100 a month. Sam has an extra £200 a month.
Extra £200 on the mortgage | Extra £200 on the card first | |
|---|---|---|
Card cleared | after 6 years | after 1 year 4 months |
Card interest | about £3,120 | about £610 |
Mortgage cleared | 14 years 10 months | 14 years 8 months |
Total interest | about £73,060 | about £69,580 |
Clearing the card first saves about £3,480, and the mortgage still ends sooner. That's because once the card is gone, its £100 payment and the £200 extra all roll onto the mortgage. Sam also gets the card off their mind more than four years earlier, which is worth something too.
To see the order for your own debts, try the debt avalanche calculator, which clears the highest rate first. If you'd rather clear the smallest balances first for quick wins, use the debt snowball calculator, or compare both in the payoff calculator.
When the mortgage can come first
Your other debt is at 0%. A 0% balance transfer or interest-free purchase card costs nothing until the offer ends. Pay it off in time, but extra money can go elsewhere until then. Check the end date, because the rate after it is usually high. See is a 0% balance transfer worth it?
Your loan is cheaper than your mortgage. Rare, but some older personal loans or car finance deals have low fixed rates. Compare the actual rates on your statements, not typical ones.
Your deal is ending and you want to borrow less. A smaller balance can mean a better rate on your next deal. It's worth asking a mortgage adviser or your lender how close you are to the next loan-to-value band.
Check before you move money
Keep an emergency fund. Money paid off a mortgage is hard to get back. Without savings, a surprise bill goes back on the card.
Settling a loan early. Under UK rules, a lender can charge up to 58 days' interest if you repay a personal loan early. It's usually still worth it on a high-rate loan, but ask for a settlement figure first.
Mortgage overpayment limits. Most lenders allow up to 10% of the balance a year before an early repayment charge. See how to pay off your mortgage faster.
Don't run the card back up. Clearing a card only helps if it stays clear. Lower the limit if you need to.
A simple plan
List every debt with its balance, rate and minimum payment. Your statements and app show the rate as APR or EAR.
Pay every minimum, including the normal mortgage payment.
Put all your spare money on the highest-rate debt until it's gone, then move to the next.
Once only the mortgage is left, roll everything you were paying onto it as an overpayment. The mortgage payoff calculator shows how much sooner you'll finish.
When to get help
If you're only managing minimum payments, using credit to cover bills, or behind on your mortgage or any debt, talk to your lender early. Lenders must treat customers in financial difficulty fairly. Free, confidential advice is also available from StepChange, National Debtline and Citizens Advice. You'll find them on our financial resources page.
Examples assume fixed rates of 4.6% on the mortgage and 21.55% on the card, monthly interest, no new spending and no fees. Average rates are from the Bank of England's Money and Credit statistics for August 2026. Your rates will differ. This guide is general information, not financial advice.