Help with overpayment

chirpchirp

I do option C. I still pay the old amount and haven't reduced the term. The reason I chose to do this is because if you lower the term of the mortgage you have to continue to pay the old rate ie

If you pay £980 over 15 years and you reduce the term to 10 years and keep your payment at £980 then the amount is paid in ten years.

Option C allows the same to happen but the term isn't officially reduced this means that if you have a change in circumstance you may find that the amount actually required per month is £500 and revert to this amount. I use option C as it allows me more flexibility in the long term and allows me to overpay at the same time. If I don't need the flexibility I have nothing to lose as it will still take the same amount of time to pay off as option A.

kirstypark

i do option c too, used to do A and it is exciting seeing the months countdown faster, but when we moved last year instead of taking on another 50 k onto our mortgage we were able to claim our overpayment fund back and keep the same mortgage which saved a lot of hassle and kept us on a great rate. Although i have no plans to do this again we don 't know what life will throw at us, if we have to stop overpaying then will be paying an affordable amount for the remainder of term. If we ever need a chunk of money then can borrow it back again paying much less than a personal loan.

I had actually paid one of our mortgages off early last year, but kept the account open with just a pound owing to let us borrow it back if we ever needed to. So thats what we will do again.

Pursey

Thank you all so much for your detailed explanations, they have been really helpful. Imma, thank you for breaking it down into the 3 options. I have decided on option C, so that I have the flexibility that you have outlined.