What do I pay first

claireclarke

I want to keep my ltv as high as possible and I have 5k to pay off my mortgage before the June anniversary date.

the mortgage is interest only self cert fixed for two years with Cheshire. They asked me if I wanted to pay the £5k off the interest or capital...I not sure which is best to do. I dont necessarily need my monthly payments to come down but I would like to reduce the amount borrowed.

can you help?
Claire

lethal0r

you mean as low as possible right?

i'd pay off the capital then you are reducing the amount borrowed.

CLAPTON

overpayments always come off the capital..

Peelerfart

I was with the Cheshire for years and they do ask some strange things but really, off the capital or interest ? what a strange question .

Capital .

Robert_Sterling_3

" They asked me if I wanted to pay the £5k off the interest or capital...I not sure which is best to do."

The overpayment ALWAYS comes off the outstanding capital it NEVER comes off the interest.

The choice you get is this:-

Do you want to keep the monthly payment the same and reduce the term of the mortgage

or

Do you want to keep the term of the mortgage the same and pay less each month.

I think you want the first of these two options.