Overpayment mortgage should I renew

Mortgage_advise

I currently have a mortgage of 130k over 25 years on a 2 year discount tracker. I am currently overpaying by £500 per month and the mortgage is due to be renewed in December.

Should I keep the mortgage terms the same when the renew is due and continue to overpay by £500 or should I reduce the mortgage terms to 15 years and pay a higher monthly premium. I am debt free and also have savings of around 20k.

Thanks for any advise.

17Dave

It partly depends on your situation and how much you can afford to pay EVERY month.

If you renew at the longer term you can at least miss a month or two overpaying.
If on the other hand you reduce the term you are committed to make the higher payment each month.

Should you be able to overpay each and every month you could still end up at 15 years but with the extra flexibility - none of us knows what will happen tomorrow!!!

Kaz2904

If you remortgage with a 15 year term then you would be dropping 8 years, how about trying just 1 or 2 years reduction in term so 19 or 20 years and continue to overpay? That way you are slightly increasing your payments but will still be able to manage your overpayments. You will find the term decreases with your overpayments anyway and like 17Dave said, you never know what's around the corner.

THE_SN1PER

Please forgive me if I dont explain myself properly as I am quite confused. I am quite new to this site however I am after a little help. I have read the blogs and they all point to overpaying your mortgage and as I dont have any debt I assume this is the way forward.
I am due to come to the end of my fixed term mortgage (5.49%)and go on to the standard variable rate (7%) however I know I will need to shop around before changing to a better deal. Anyway I am very interested in overpaying my mortgage payments to cut years off, however this is my dilema (I have 17 years left on my mortgage at 115k).

• Do I get the best deal with overpayments with 17 years (eg overpay approx £300 extra per month)
• or Do I get the best deal to say over 12 years and pay less amount on overpayments (eg overpay approx £150)
• or Do I go for an a one account (ie virgin) and have the flexability.

I would only be able to overpay a set amount and I dont no if the first 2 bullet points would be the same.
Any suggestions would be appreciated

zekepes

If your mortgage lender allows you to overpay by an unlimited amount (like ours - which is why we chose it) then I would keep the security of the longer term and lower monthly basic. In cash terms I cannot see how it makes any difference (if you are paying the same amount).
Like you we overpay our mortgage by £500/month + an annual lump sum at the moment - the aim is to increase when we can. Somehow I am much more motivated to make 'overpayments' then higher basic payments. We also like the security of not 'having' the pay the higher amount if we hit a bad patch for whatever reason or the interest rate rockets.