Should I make overpayments on my mortgage?????

Chief155

Hi,

Im looking for some advice as Im not very clued up to how this works.....should I make overpayments on my mortgage or keep the money in a decent savings account?

My mortgage is as follows with Nationwide ;
£139,500
with 29 yrs and 9 months left
Monthly payments of £854.....6.58%

I believe with Nationwide I can make overpayments of upto £500 a month without penalty. How would this then affect my interest?

Any advice would be greatly appreciated!!!!

Radiantsoul

NAtionwide recalculate interest daily and will reduce your payments, but keep the same term unless you tell them otherwise.

A £500 overpayment would reduce your mortgage by around £1 or £2 per month(ie virtually nothing). Or you can ask them to keep the payments the same and reduce the term.

The thing is that each overpayment adds up and it is more important when you come to remortgage as it will increase your equity and make it easier to get a better rate. Also bear in mind you won't get much interest on £500 at the moment!