some advice please

riquelme

my OH has come into some money 10,000 and is interested in paying a lump sum off our mortgage

we currently owe approx 46,000 and have monthly payments of approx £250 on the SVR.
we have an appointment with morgtage advisor at nationwide tommorrow to discuss our mortgage

so, some advice please. will this over payment affect our monthly premiums or is the interest calculated per year. (some clarification and advice here please) is this reasonable to expect immediate changes to our monthly premiums

apologies for any wrong terminology any help gratefully received

Jonbvn

The answers to your questions depend on your mortgage T&C's. You should check them first. This notwithstanding, I will answer your questions assuming you have a typical repayment mortgage.

1. Your 10k payment will reduce the capital on your mortgage. This will either reduce the term or reduce the monthly repayment amount. AFAIK, most lenders keep the same term and reduce the monthly payment. I think you can decide what you prefer in most cases.

2. Most lenders calculate interest daily. Therefore, you overpayment should have an immediate effect. However, a few lenders calculate interest yearly. In this case, you should time your overpayment to be made at the end of the year, just before interest is calculated for the next year.

riquelme

thanks, thats exactly what i wanted to know