Best way to make Overpayments

Thrifty_2

I have a flexible offset mortgage which allows me to make overpayments of (£1000 a day) on a 48k mortgage (currently 17yrs left to run). I am paying the required amount of £345.00 month @ 5.35%.
As i am self - employed i have an extra £200 month i can overpay. Should i pay the £200.00 monthly or should i pay £50.00 a week. I want my mortgage paid off A.S.A.P

(Theoretically i suppose i could overpay it daily ie: £200 divided by 30 days £6.66 a day )

Any help appreciated.

trackaccessgirl

It just depends if your interest is calculated daily or not. If it is calculated daily, then pay the money weekly (assuming there is no set minimum payment).

Thrifty_2

Yes Interest is calculated daily.
There is no set minium payment.

trackaccessgirl

My bank imposes a set minimum payment of 500 pounds! If you can make smaller overpayments then it will take effect straight away. The difference between paying weekly and waiting till the end of the month will only be a few quidb but over the course of time it will add up and make a difference.

superjames4

if you have an offset mortgage it won't make any difference will it? whether you pay off the mortgage or have it sat in the offset account? so it just comes down to convenience to you?

Thrifty_2

As i understand it paying it of the capital amount is better than offsetting.

Joe_Bloggs

@Thrifty
What makes you say that? The two situations result in the same reduction in the amount of interest paid.
J_B.

Thrifty_2

Thanks for your reply so you say that saving the £200 in my offset account every month is effectively the same as paying it of the capital amount except that by offsetting i have instant access to the money.

I just see people saying that they have paid X amount of there mortgage is it that they have a less flexible mortgage than mine ?

As you can tell i have become very confused.

Joe_Bloggs

@Thrifty
Yes and yes. I've had an offset in the past.
J_B.

halloweenqueen_2

I have an offset mortage and I'm paying off of the mortgage amount, doing this builds up a reserve, so in effect if I have an emergency i can get to some money, but if you pay it off the mortgage its done, gone. It gives me much more of an incentive to see the amount go down every month by about a thousand, the danger with me if I put it in the offset savings, its 'my money' where as I can now see myself paying off my debt.
As soon as I have money for an overpayment I put it in the mortgage account.

Thrifty_2

I have £4000 offsetting my mortgage and an extra £200 a month disposable income i just wondered whether there was a difference between offsetting it against the mortgage or paying it off the capital, it appears that offseting the money reduces the amount as if it had been paid off, but still gives me the flexibility to get at the money if i wish.

Thanks to superjames & joe bloggs .

Anybody got any ideas how this money could work better for me?