10% mortgage overpayment

Philip2013

Hello

Brand new to this site and wondered if anyone can shed some light on a question I have.

Just about to get my first property and my mortgage broker has given me a prospective deal for £37000 whereby in can overpay the mortgage by 10% per annum.

I have placed a lot of emphasis towards the overpayment aspect t, which shouldn't be an issue as my payments would only be around £140 per month. My question is, if I Max out and overpay by 10%, is 10 years theoretically the fastest period of time I could pay it off completely??

Any advice would be much appreciated

Many thanks

Philip

pawlala

How long are you tied into the mortgage fixed period for? Once this term is over you should not have any early repayment charges. Usually 2,3 or 5 years. After this period is up you can either pay off all your remaining balance, move mortgage provider or agree a new term. This is not the same as the length of the mortgage.

The small print will probably tell you.

Philip2013

Hi and thanks for the reply

I'm tied in fixed rate at 2.59% over 2 years

The small print also mentions that it can be paid off in full after 2 years, but with a hefty charge added. I was hoping in first 2 years if I paid off essentially 20% of balance I would be able to make some kind of dent in the mortgage and hopefully reduce the payments too

P

Beckyy

Generally after the 2 years is up you would remortgage with a new product/provider to get a better interest rate. Repayment limits tend to only last for this fixed period too. 10% is around average for a repayment limit and providing you're not intending to OP a huge amount more during the 2 years I wouldn't go for a different product with a potentially higher interest rate just for more OP freedom, personally.