overpayment advice please

beautyqueen88

Hi everyone we will be moving into our first home on friday so my mortgage will be starting soon and i was wondering about overpayments
Our mortgage is with bristol and west and we are borrowing 99000
it is interest only with a rate of 6.4% (could be wrong im not sure because im at work and cant remember but it's deffinitly 6.something)
the repayments are around £573 a month
and i was thinking about overpaying around £80 a month

Is this worth doing or not? we will be changing to a repayment mortgage when our fixed rate ends in 3 years.
Also as the payments are taken by direct debit who do i get in touch with about this the mortgage company or my bank?
i understand there are mortgage calculators on here but with ours being interest only im not entirely sure how it works?
Thanks

2latenow

Direct debit is "pulled" out of your account -- so it's the Mortgage company that you need to talk to in order to change it.

You might find you can make overpayments "ad-hoc" too -- either by sending a cheque or by "pushing" money via your Bank's internet banking. A benefit of this method is you can vary it (upwards?) as much as you are able. Whether you can pay by cheque/internet banking seems to depend on the mortgage lender...

For mortgage calculators, check the sticky at the top of this forum. The Egg one, for instance, has an "interest only" option. I've not checked many of the others but I guess they do similar.

If you are thinking of switching to repayment in 3 years time, it might be worth finding out the approximate additional cost of the repayment (because you will pay interest + repayment, instead of just interest). Then have that figure as a target for your monthly overpayment during the 3 years on interest only. This will mean you are already "paying" the full int+repayment so will get you prepared for the change.... And if you manage to exceed this figure in O/P each month then you will know you can still O/P even after the change ! (if that makes sense)

beautyqueen88

i cant send the money by cheque as there is a £50 admin charge for doing it that way unless it is a lump sum over £2000 but thanks for pointing me in the right direction the egg calculator is very helpful