overpayment help

loveGSDs

i have just made my very first overpayment :j - ok it was only £30, but its a start

looking for some advice tho... i've recently changed bank and the direct debit instruction got lost therefore i had to pay my mortgage by card over the phone - this is how i made the overpayment.

im on SVR and pay £620 per month. however would like to pay £650 per month - the guy on the phone said that if i change my DD to £650 this will reduce the term.

i dont really understand - is this what i want to do? My aim is to save as much money/have as much equiy as possible so that we can get a deposit to move.

can someone advise?

Thrugelmir

By overpaying your mortgage. You will repay it quicker. Thereby reducing the term.

By owing less on the mortgage you will increase the equity in your home. To use against a future purchase.

The advantage of overpaying the mortgage is that it takes away the temptation to fritter the money away. So well done for starting the process. Only overpay by what you can comfortably afford. Think it of a marathon not a sprint.

dshart

Rather than setting up the DD to include the overpayments it may be easier to keep your mortgage payments on DD at the required amount and make overpayments separately by standing order. That way if you are struggling to make overpayments at a later date you can stop the standing order and still know you will not default on your mortgage payments.

loveGSDs

oh i didnt know i could set up a standing order for that.

i was considering not setting up the DD at all and just continuing to pay by card each month - do you guys think that would be ok?

i know some would say thats risky incase i forget to make the payment and end up with a default - however the chances of me forgetting to pay my mortgage are non existant (saving money/making money is on my mind everyday lol)

dshart

I think you would be safer paying the mortgage by DD and I think the lender would want to see that. For additional payments, depending on your mortgage you can pay them in at any time or by any means allowed by the lender.