Allow overpayments to reduce term or monthly payment?

womble12345

I have been overpaying my Nationwide mortgage for a while, by default the overpayments go towards reducing my monthly payment. Is this the best way to do it or should I ask Nationwide to make them reduce my term instead? My goal is to reduce the total amount I pay to Nationwide over my whole mortgage term as much as possible.

Can someone help me with an example of the effect of each option?

Thanks

ValHaller

It makes substantially no difference as long as you are overpaying. As you approach the very end of paying it all off you may have something like £15 outstanding to pay over 150 months with your payment at 10p/month. Well obviously you pay off the £15 in one go and finish the mortgage 12.5 years early

If you have to stop overpaying due to some short term crisis, it helps to have the monthly payments reduced and keep the term rather than having to meet the full initial monthly repayment.

womble12345

Thanks ValHaller, I will leave everything as-is.

Jonbvn

ValHaller wrote: »

If you have to stop overpaying due to some short term crisis, it helps to have the monthly payments reduced and keep the term rather than having to meet the full initial monthly repayment.

This is what we did on our way to a MF life.