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Overpaying – how to impact capital, not interest
Seabagg
Posts: 1 Newbie
I've been taking a look at the guide to overpaying mortgages on this website.
I note it says the following:
"Normally the repayments only go towards repaying the interest of the loan, not the capital (the actual amount you borrowed). So ensure any extra payments you make specifically go towards decreasing the capital (in other words decreasing the actual debt) to attract less interest."
Most of my mortgage is capital + interest repayment. But part of it is interest-only (supported by an endowment). My question is this, if I overpay, how do I ensure these payments impact the capital. Is this something I need to agree with the lender, or how does it work?
I note it says the following:
"Normally the repayments only go towards repaying the interest of the loan, not the capital (the actual amount you borrowed). So ensure any extra payments you make specifically go towards decreasing the capital (in other words decreasing the actual debt) to attract less interest."
Most of my mortgage is capital + interest repayment. But part of it is interest-only (supported by an endowment). My question is this, if I overpay, how do I ensure these payments impact the capital. Is this something I need to agree with the lender, or how does it work?
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