Mortgage over paying

Thrugelmir

Paul_T_Newby wrote: »

It sounds over paying is only worthwhile if commited to over paying for the duration of the mortgage.

Mortgage rates are unlikely to remain low in the longer term.

So clearing capital debt will pay off. Less interest more debt repaid.

Personal circumstances can change very rapidly in the course of a lifetime.

blueberrypie

Paul_T_Newby wrote: »

It sounds over paying is only worthwhile if commited to over paying for the duration of the mortgage.

Not at all. It's always worth overpaying *unless you can do something else with the money that will pay more in interest, after tax, than you are paying on your mortgage*.

Indeed, overpaying in the early days of a mortgage has an effect for the remainder of the mortgage. On a £100k mortgage, taken at 5% over 25 years, even paying an extra £500 in your first year, even if you never overpay a penny again, will save you £1200 in total.

Consider too that if you reduce the amount you owe on your mortgage now, or at some time before you remortgage, you could be eligible for better mortgage deals because of a lower LTV.

pammyj74

I have been overpaying for the last 12 months and once I remortgage (or let it go onto the SVR) I am going to reduce the term (similar to OP but not as much of a choice) this way has to be disciplined but it helps my mindset and its only going to be an extra £50 a month but reducing by 6 years (the rate is 2% less)
I may also be able to OP on top of that as well but this way it lets me OP a bit more.

MORPH3US

I would echo blueberrypie.... regular is better but even the odd one off payment is worthwhile..