Reduce term or over pay?

Miss_Poohs

I don't have a huge amount to pay back on my mortgage.

I've been told I can reduce the term but isnt that the same as over paying?

My current payment is just under £300 per month I'd like to pay an additional £100.

Is there a difference and is one a better option than the other?

Thanks

Miss P

Farmerbob

Yes its is the same, I would just overpay, depending on who your mortgage is with overpayments can either reduce the term or the term remains the same and they adjust the payments on the revised mortgage balance.

I overpay currently and my term reduces, but if I do need to pay less one month for any reason I can as I just reduce the overpayment, where as if you reduce the term and pay higher payments as a result it gives you less flexibility in your payments. I would just check what the limits on the overpayments just to avoid any charges you can speak to your lender about it.

Miss_Poohs

Thanks farmer B - I'll check for any penalties.