overpayments on mortgage help please

debbiedonut_2

Please can someone help me.We have a mortgage of 144k over 15 yrs split 74k repayment 70 interest only.we want to see how much we would save by overpaying on our mortgage by £300 per month. i used the egg mortgage overpayment calculator which said i would save £25705.I am a bit confused as i am overpaying by £54000 but only seem to be saving £25705.Do I add the £25705 on to the £54000? Is this what I will save? Your advise and figures would be appreicated.
Thanks

homer_j_3

the money you are saving is the interest that you would have paid had you not made the overpayments.

So you would have paid, for example, 290k over the full term including interest exc the 70k you would owe as capital.

By making a saving of 25k you will pay 265k in total exc capital owed (keeping it in its simplist explanation) because you would have made the equiv of the same payments you would have made over the natural term but in a shorter period of time.

Its late so I hope this makes sense

Just to add having read back.

Your overpayments will decrease the capital owed at the end of the term so you will not have to pay 70k back as the overpayments will chip away at this

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