Should I over-pay a mortgage?

kj2000

Hi,

I have a motgage which permits me to overpay. All of the advice I've read is that I should clear debts before having savings. I have some spare cash that I'm considering putting into my mortgage. I would like to know if this is advisable.

* Will the overpayment reduce my remaining monthly payments or...
* ...will the overpayment reduce my mortgage term?
* Should I expect any admin fees to pverpay?

Also, would I be able to withdraw the overpayment if I need it? I ask this because some people recommend keeping six months of "living expenses" in savings.

Thanks!

KJ.

swizzle_2

It all depends on what kind of mortgage you have, best to give your lender a ring and have a chat.

I have on Offset mortgage and my payments/savings are classed as gross- this means that my term reduces not the mothly repyment amout. If they were classed as net- my monthly mortgage pymt would come down and the term stay the same.

You should not have to pay any admin fees to overpay.Some just don`t allow overpayments or only a certain amount each year.

As for the overpayment, most don`t let you have a repayment- but let you have a payment break, ie if you pay double your mortgage for 6 mths, you would be able to pay nothing for the 2nd 6 mths.

Hopes this helps, I was in the same boat as you, and speaking to mortgage co sorted it out.