Best way to improve LTV

LittleG_3

My partner and I are on a fix rate with Nationwide that finishes in April. I reckon our LTV is just under 80%. As we won’t be able to get a decent fixed rate as our LTV is too high we’ll go onto Nationwide’s STV which will shortly be 2.5%. We already make regular overpayments of around £200 per month and soon we’ll be making bigger overpayments by keeping our ‘normal’ monthly payment the same as it was before the rate change. But our priority is to reduce the LTV as much as we can. We have 18 years left on the mortgage but could take a year or 2 off it and remortgage over 16 or 17 years. But obviously our payments would be bigger. Would we be better keeping the term at 18 years and overpaying more each month. Am I right in thinking that would have a more beneficial affect on the LTV than reducing the term?

Thanks in advance :T

Trying_to_be_good

The only ways to improve LTV are:

1. reduce the size of the loan
2. increase the value of your home

Changing the term has no effect on LTV, just on how much interest you pay overall. So overpaying is the best/only way to go.

CRUISEMAN

Trying_to_be_good wrote: »

Changing the term has no effect on LTV, just on how much interest you pay overall. So overpaying is the best/only way to go.

How do you determine this? If the mortgage term is reduced, the amount of capital repaid each month will be more (assuming a capital and interest mortgage). This will reduce the loan amount and thus the LTV.

Bargain_Rzl

I think TTBG's point is that changing the term would make no difference. The key to improving your LTV is increasing the TOTAL amount you pay each month (that's regular payments + overpayments).

As you're with Nationwide, moving onto SVR would enable you to make unlimited overpayments so it makes no difference either way. If anything, it would be preferable for you to leave the term unchanged because this would reduce your required monthly payment which could be useful should your income decrease.