Whats the best way to overpay?

Gillybean

My mortgage provider allows me to overpay by 10% of the balance every year.

I'm feeling a bit slow and unable to do the math this morning, so whats the best way to overpay- a bit as and when or save it till I've got a lump sum and do it then?

I think it's the latter, isn't it?

kje_2

The interest on my mortgage is calculated daily so I pay as and when. Plus, when the money is gone it's gone and I can't dip into it as I could if I put it into a savings account during the year.

Welshlassie

Depends on when the interest is calculated but usually it is better to pay it off as and when you have it, instead of a lump sum.

george_jetson

Agree with the above responses - find out how often interest is calculated, then only transfer money over when it's going to be taken into account.

In the longer term, I'd seriously think about getting an offset mortgage with interest calculated daily. If you link your savings and current accounts, all your money will effectively be driving down your mortgage without you having to do a single thing. Combine this with use of a credit card wherever possible (keeping your money in your account for longer) and this could save you a fortune in the long term.