If you do the sums, the figures definitely don't add up. The only way you can reduce your mortgage is by overpayments. Most lenders allow you to do this. Even Northern Rock are allowing me to do it without charging me. I'm paying £200 in overpayments and that is knocking over 9 years off my mortgage. Depending on your lender you can even take back the overpayments later if you find yourself in need of the funds. I advised a work colleague to do this and he's started overpaying by just £50 as that's all he can afford, however he's still knocking a couple of years off his mortgage term. His intention is to increase it by £50 each year if funds allow. People may disagree with my thought process but any extra you can pay, then pay it each month as most lenders calculate their interest daily.