What happens if I overpay a fixed rate?

Moldy

Hi all,

I realise this may be a very silly question with an obvious answer but I wanted to make sure anyway!

I have just agreed an 80k mortgage from Natwest at 4.59 for 5 years with a monthly cost of £448. I am allowed to overpay up to 10% each year. If I do, does the amount I pay each month drop and by how much? I'm not sure if the "fixed rate" is just the % or the % and the monthly cost?

Thanks for any help!

Rob

beecher

Your payments will either reduce or the term of the mortgage will decrease - depends on your lender and which you prefer. By term of the mortgage I mean the overall term, ie 25 years, rather than the length of your fix. The amount it'll reduce by depends on the size of your mortgage and interest rate. There are online calculators which can help you work out what difference overpayments make.

Moldy

Great thanks Beecher