Post Office Mortgage overpayments? Please help

Katieprecious

Any advice please on what to do.

I have a mortgage with the Post office that is 5 year fixed rate (Bank of Ireland). I am one year into the mortgage and was hoping to make overpayments on the mortgage so that it will be easier to reduce the term of the mortgage when our fixed rate period is up and reduce overall interest charges.

The plan was to ask them to take a monthly overpayment of £100, but it turns out that the minimum overpayment I can make is £500 and I can pay this by direct debit. I can't spare £500 on a monthly basis but would it still make sense for me to save the 100 per month into my bank account and then make the overpayment each time I have accumulated the 500? Then if they ended up reducing the amount I pay each month for my mortgage I could just add this to the lump sum that I pay off?

Is this a good idea or not? Im not 100% on how it works and whether it will have much impact on our mortgage, we are currently in a fixed 5 year mortgage over 35 years on a rate of 5.99% interest. Any advise would be greatly appreciated

The_J

If you were planning on saving that money you're not going to get a savings rate near 6% so it definitely makes sense to chuck money at the mortgage if you can afford it.

Looks like you'll have to save up every 5 months to make the overpayment which is a pain but as long as you remember you'll be fine.