Advise me free wannabes

Okay my mortgage started in 2006 at £215k
It's now £160k

I'm in a blessed position to pay £20k off my mortgage next month, but there is the question:

"Do I leave my payment the same (post £20k) and reduce my term" OR
"Do I leave my term and reduce the monthly cost"

Help, which is better?


  • Reducing the term will save you interest (try looking at the calculator to see how much) as you will not be paying interest on that 20k. Reducing the monthly repayments will mean that you will not save any money, but you ate reducing you contracted monthly commitment so it is useful if you think you might struggle in the future.

    Check your terms and conditions in case the money will set off ERC?
    House purchased November 2013
    Original MF Date: January 2045 - £104,400
    Current MF Date: April 2030- £48,719. 75
  • Personally i would reduce the term to save on interest but as the above user stated it depends on your confidence that you can comfortably keep up your monthly payments in the future.
    Overpayments Target for 2015 £2170 / £8000 27.1%
    Mortgage as of January 2014 [STRIKE]£129,142[/STRIKE] - Now £113,948
    Original end date [STRIKE]July 2041[/STRIKE] January 2038
  • FunkeydunkFunkeydunk Forumite
    4 Posts
    Sixth Anniversary Combo Breaker
    Great feedback guys thanks
  • I've just paid 21k off my mortgage to reduce the term. Yesterday in fact.

    For me, the quicker I can become debt free the better, so reducing the term was key.

    My advice, for what it's worth, is to reduce the term. Paying a smaller sum but for just as long would make me feel just as trapped.
    12/2013 Mortgage £58430.63 - 24 years remain
    02/2014 Mortgage £37095.41 - 12 years remain
    04/2014 Mortgage £33385.06 - 10 years 5 months
    09/2014 Mortgage £22270.30 - 6 years 4 months
    02/2015 Mortgage £12001.09 - 3 years 2 months
  • pjreadpjread Forumite
    1.1K Posts
    Part of the Furniture 1,000 Posts Combo Breaker
    it's over a 10% overpayment so be sure you won't trigger ERC's - depending on rate, it may be better to repay 10% then wait until the 'anniversary' to overpay the rest.

    Personally, my OP's reduce the contracted payment. it adds flexibility for now, and the term isn't really fixed anyway unless you stick with one lender/mortgage forever. That said, I'm only one year in (of a 30 year term, but 15 year projected "end of mortgage")
  • AlchemillaAlchemilla Forumite
    6K Posts
    Ninth Anniversary 1,000 Posts Photogenic Name Dropper
    Geek4life sums it up well. Lucky you.
  • themull1themull1 Forumite
    4.3K Posts
    I overpay, and keep the term and the dd's the same, that way im also slightly overpaying on the dd's each month, as well as the overpayment amount.
  • FunkeydunkFunkeydunk Forumite
    4 Posts
    Sixth Anniversary Combo Breaker
    The thing is, I only pay 0.63% above base rate, 1.13% awsome eh, as I'm on a base rate tracker, also I can make unlimited overpayments with no impact. So I think I'll pay off as much as I can in a lump sum, then overpay, HSBC automatically reduce the term on this mortgage so it's simples ...squeak. Thanks for all the advice I really do appreciate it.
  • edinburgheredinburgher Forumite
    13K Posts
    Part of the Furniture 10,000 Posts Name Dropper
    You have a 1.13% rate?? That's awesome, I wouldn't be overpaying if I was in your situation, keep it in savings and you're being paid to have a mortgage (so to speak) :)
  • FunkeydunkFunkeydunk Forumite
    4 Posts
    Sixth Anniversary Combo Breaker
    I know, but I really want rid of this, mortgage.
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