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Question about overpaying

weehev
Posts: 58 Forumite
Hi all,
Im looking for some advice on overpaying on my mortgage each month - how do i do this?
i currently pay £567 via direct debit,but could comfortably overpay by around £50 each month whilst still keeping some aside for emergency savings.
im with Dunfermline building society with an outstanding mortgage of approx £88,000 on 5.2% svr.
do i have to overpay by a set amount each month or can that change depending on what i have spare?
many thanks xx
Im looking for some advice on overpaying on my mortgage each month - how do i do this?
i currently pay £567 via direct debit,but could comfortably overpay by around £50 each month whilst still keeping some aside for emergency savings.
im with Dunfermline building society with an outstanding mortgage of approx £88,000 on 5.2% svr.
do i have to overpay by a set amount each month or can that change depending on what i have spare?
many thanks xx
0
Comments
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can anyone help me??
pretty please0 -
The only definitive answer would be from your mortgage provider. Give them a ring and see what advice they can offer. Every provider seems to have a slightly different way of doing things.
There's a sticky thread with loads of overpayment calculators that you might like to play around with. Your £50 per month will make a good difference over the term of the mortgage.0 -
Hi Weehev
Alfiesmum is right in that all mortgage providers seem to have their own little ways of doing things so the first thing you should do is give them a call.
Usually there is more than one way of making your payments and you could even combine different ways e.g. you could make a fixed extra payment via standing order than other variable amounts via internet banking etc
Make sure you ask your provider the following + anything else you might think important- can you overpay and if so is there any limits e.g. a miniumum or a maximum
- what methods can you use e.g post, cheque at branch, internet banking, standing order
- what account details, numbers etc do you need to use to make OPs
- will they reduced your usual monthly direct debit if you overpay - if so don't worry, you can get round that one
- when do they apply your overpayment, straight awat or a particular date in the month
- can you get your OP's back if there was an emergency or use them if you needed a payment holiday in an emergency
Good luckMFW Start Date 1.4.08. Updated 23.1.18. MFW date 1.8.18
Original Mortgage o/s £187,643 / £71,904 (-115,739)
Repay o/s £92,661 / now £55,900 (-36,761)
Int Only o/s £94,982, now £16,004 (-78,978)
Total daily interest £1 [a) £0.77 b)£0.23
Total OP's:2018 target £TBC YTD £1,9950 -
Hi Weehev,
You need to check with you lender but the other important question is "do they calculate interest annually".
I know abouttimeto sort of covered this in their 5th point - but there are about a dozen sleaze bag lenders who use this trick.
As far as I know Dunfermline do calculate annually (very poor) so any overpayment you make will not save interest until the anniversary date of your mortgage (or some date on your mortgage statement). In this case it may be better to save the £50 a month in a regular savings account, then make one payment per year (providing your mortgage doesn't stipulate a maximum over-payment per month) making sure you time it right.
Besides - have you looked at saving then paying your car off faster. Is it a loan or a finance deal ?
Also, why not have a larger emergency pot ? 3-6 months salary might be sensible.0
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