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Overpay or save the cash?

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  • snowmen
    snowmen Posts: 673 Forumite
    Part of the Furniture 100 Posts Name Dropper Combo Breaker
    I overpay on my nationwide mortgage and make sure to do max £499 a month - I don't want to reduce the term, I want to pay off the capital but keep my actual mortgage payments the same every month, This means I can keep chipping away at the amount owed every month.

    the only way of keeping your mortgage payments the same every month by overpaying is to reduce the term when you overpay. Then the monthly payment remains the same regardless.
    Either setting the default to reducing term when you overpay or to reducing the monthly payments makes no difference to the capital owed - every time you overpay the capital will be reduce by this.
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