Reduce the term or reduce amount?

davidscot

cabbage wrote: »

I'm with Nationwide too and overpay by £500 per month. I do this all online and there's an option on one of the online banking pages that asks if you want to reduce the term or your payments. Once it set, it continues that way until you change it.

I don't have online banking facility yet. So I take it you can chop and change to your hearts content?

brizza

JimmyTheWig wrote: »

Brizza's suggestion is possibly limited by the amount you are allowed to overpay each year / each month. If you're getting close to this limit then you definitely want them to reduce the term.

It also relies on you upping the overpayment each month. Given you don't want to contact them each month, this might be off-putting, too.

But in terms of flexibility, it's a good plan.
Ultimate flexibility would be an interest-only mortgage, using overpayments to clear the balance.

Yup, totally agree. I considered putting that, but decided I'd waffled along too much!

It's a scenario myself and my girlfriend have thought about a bit, especially when, say, children are on the medium term horizon.