Overpaying

waterman3

I've been looking on the mortgage calculator to see how much money i could save if i make a lump sum overpayment.

obviously, if i make the overpayment now i would save more than if i made it a year from now.

Does that mean that the extra money saved by overpaying earlier is what i would've paid in interest for that year or is the saving spread over the course of the term?

Sofree

I believe the saving is spread over the course of the term but am not sure. Overpaying seems to make great sense if you can afford it.

getmore4less

Depends how you look at it

If making a planned payment early then the saving is for just the early period.

If it is extra money then it is for nearly the full term, because it will get paid of early if you keep normal payments the same.

In effect you pay(part/all) the last payment early.