A question that only exists because of how banks actually bill
If your mortgage schedule divides the annual rate by twelve, the question in this article is meaningless. Every month is identical in that model, so the 19th and the 21st are the same day and an overpayment does the same thing whenever it lands.
Real lenders do not work that way. In Spain, interest is normally charged on the actual number of days between payment dates, divided by the actual length of the year — 365, or 366 in a leap year. And on variable or mixed mortgages, the lender resets your instalment at each review from the balance it sees on that specific date. Those two facts turn "when should I transfer the money" into a question with a real, quantifiable answer.
Two mechanisms, pulling with different strengths
1. Days of interest
This one is simple and always points the same way. Money you repay on the 5th stops accruing interest on the 5th. Money you repay on the 20th accrues for fifteen more days.
On a 20,000 € overpayment at 3 %, fifteen days is about 25 €. Real money, but small. What matters about this mechanism is its direction: earlier is never worse. There is no scenario where delaying an overpayment saves you interest.
2. The recalculation
This is the bigger effect, and it is the one people are actually asking about.
On a variable or mixed mortgage, the lender recalculates your instalment at each review date. It takes the balance outstanding at that moment, the new rate, and the number of payments still to come, and works out a fresh level instalment.
Land a lump sum before the review and the new instalment is computed on the reduced balance. Every payment for the rest of the loan is lower. Land it after and the instalment was already fixed on the higher balance — the overpayment still helps, but it gets applied against a slightly shorter remaining term, which changes the shape of the benefit rather than simply increasing it.
So is "always pay before the review" correct?
Mostly, but not for the reason people give, and not always by the amount they expect.
If you chose reduce the term, paying earlier is unambiguously better. You keep the same instalment either way, so the only thing that changes is how long you owed the money — and that is the days-of-interest mechanism, which never runs backwards. Before beats on, which beats after, every time.
If you chose reduce the instalment, the picture is more interesting. Paying before the review clearly lowers every subsequent payment, which is what most people want. But the effect on total interest is close to a wash. The reason is that an overpayment made after the review gets recalculated over a marginally shorter remaining term, which means a slightly higher instalment, which means slightly faster capital repayment. The two effects partly cancel.
The honest summary is this: before the review reliably gives you a lower monthly payment; it does not reliably give you less total interest. Which of those you care about is the actual decision, and it is worth checking your own numbers rather than trusting a slogan.
Working it out on your own loan
The reason to compute this rather than reason about it is that the answer depends on your rate, your remaining term, the direction the review moves the rate, and which mode you picked. That is four variables interacting, which is exactly the kind of thing people get wrong by intuition.
The Mortgage Amortization Planner has a panel for precisely this: put in the amount and the date you had in mind, and it runs the same loan three times — the day before, that day, and the day after — then reports total interest and the next instalment for each. No rule of thumb, just three schedules.
A worked example
Take a 250,000 € mortgage signed in September 2024: fixed at 2.0 % for the first year, then Euribor plus spread landing at 4.5 % from the first review. You have 15,000 € and the review falls on 20 September 2025.
Run the same overpayment as reduce-the-instalment on three dates and the pattern is clear. Paying on the 19th means the lender computes your new instalment on a balance 15,000 € lower, so every one of the remaining payments comes out visibly cheaper. Paying on the 21st means the instalment was already set on the full balance; the overpayment then gets recalculated a month later over a marginally shorter horizon, so the resulting instalment is higher than in the first case, and the total interest lands within a whisker of it — a difference of a few tens of euros on a 15,000 € overpayment.
Switch the same overpayment to reduce-the-term and the ambiguity disappears: the 19th wins on total interest, the 20th is second, the 21st third, exactly in date order and for the simple reason that you owed the money for fewer days.
Note what the example does not show: a dramatic difference. Two days apart, on 15,000 €, at these rates, the numbers are close. The decision is worth getting right, but it is not worth panicking over — and it is certainly not worth delaying an overpayment by three months to line it up with a review.
What if your mortgage is fixed?
Then there is no review, and only the first mechanism applies: pay as early as you can and there is nothing else to think about. Every day you hold the money is a day of interest you are choosing to pay.
One nuance still applies to fixed loans, though. Because interest is charged on real days, the calendar position within the month is not neutral. An overpayment made just after a payment date has a full period to work before the next interest charge is computed; one made the day before the next payment barely affects that period at all. If you are already sitting on the money, transferring it shortly after a payment date rather than shortly before the next one is a small free win.
Finding your actual review date
None of this helps if you are guessing at the date. Your review is set in the deed, and it is usually one of:
- Annually or every six months from the signing date, which is the most common arrangement.
- On a fixed calendar date, such as every January and July regardless of when you signed.
- At the end of the fixed stretch on a mixed mortgage, after which the normal cycle begins.
There is a second date that matters and is easy to miss: the index value used is not the one on the review date itself but the published figure from a set period beforehand — typically the previous month's official Euribor. So the rate that will apply to you is often already knowable weeks before it takes effect. That is useful, because it tells you which direction the review will move before you have to decide.
Give yourself a working buffer
"Before the review" means the money has to be applied to the balance before the review, not merely sent before it. Banks vary in how fast they process an early repayment, and some only apply them on specific dates.
Practical advice: aim for a week of margin, not a day. The interest difference between the 13th and the 19th is a few euros; missing the review entirely because the transfer sat in a queue for four days costs you the whole recalculation benefit. Call and ask what their processing window is before you cut it fine.
Do not let the fee decide it for you
Check what your early repayment costs before optimising the day. Spain's Ley 5/2019 caps it at 0.25 % during the first three years or 0.15 % during the first five on a variable loan — the lender picks one scheme at signing — and at 2 % for the first ten years then 1.5 % on a fixed rate or a fixed stretch. In all cases the fee is also limited by the lender's actual financial loss, which is frequently zero.
Worth noticing: on a mixed mortgage the cap follows the stretch you are in. The same overpayment can be free during the variable years and capped at 2 % during the fixed ones, which is a much bigger consideration than a day of interest either way.
What this looks like in practice
A workable routine for anyone with a variable or mixed mortgage:
- Find the review date in your deed and put it in your calendar with a reminder two weeks before.
- When the reminder fires, check the published index for the reference month — you will usually already know which way your rate is going.
- Decide what the overpayment is for: a lower monthly payment, or less total interest. They are not the same goal.
- Run the three dates on your own loan rather than applying a rule.
- Transfer with a week of margin, and confirm the bank has applied it to capital rather than parking it.
If you have not yet settled the prior question — whether the overpayment should cut the term or the instalment — start there, because it changes the answer to this one. That is covered in Overpaying Your Mortgage: Cut the Term or Cut the Payment?.
The short version
Two things make the date matter: days of interest, which always reward paying earlier but only slightly, and the instalment recalculation, which is the big one and only applies to variable and mixed loans. If you are cutting the term, pay as early as you can and stop thinking about it. If you are cutting the instalment, paying before the review reliably lowers every future payment but does not reliably lower your total interest — so decide which of those you actually want, and check it against your own schedule instead of a rule of thumb.