over payment

big_glenn

hello there, i have a fixed rate mortgage and it is soon up for renewal, anyone know if it is better to overpay my mortgage (currently over 20 years) or go for a shorter term eg 10 years which one pays off faster and or saves interest:o

Any

Are you sure your mortgage company will let you overpay?

Are you sure you are going to be able to afford to maintain hight repayment? (ie - if you are overpaying, you can choose how much and when, but if you get deal over 10 yrs you will have to pay that set amount every month)

big_glenn

mortgage lender will allow over payment, i can afford an extra £300-400 pcm

Any

Overpaying will allow you extra flexibility (you don't have to if you don't want to).

In the question of paying interest -
If you pay £200 @4.9%apr it is exactly the same as paying £150+£50 @4.9%apr.. The amount of interest should not change.

The main question is whether you want the flexibility, or if you want the responsibility.

[Deleted User]

Personally, I would opt for the flexibility. If you lost your job or ended up in a lower paid one as I have, you would be able to rearrange your finances more easily.