interest only mortgage one off large overpayment

lilylaren

I have recently sold an inherited property and have the proceeds sitting in online savings the orginal plan was to use as a substantial deposit on a house purchase but due to payday loans and old adverse our application has fallem on its backside despite only being 40% ltv



so its looking like staying in rented is the way to go atm.. I own a property small flat out of the area that I let out - not an option for us to live there due to size and location.
rental income currently double mortgage payment.

mortgage rate very low for adverse (end of fixed term since 2009 now tracking libor base rate) ibe been told remortgaging would not get me this good a rate due to adverse..

I hate that its on interest only! so would like to pay the large overpayment and then carry on paying my usual amount every month if his meant I was paying interest and some balance?

what would happen if I was to pay a lump sum of 100k (total mortgage is currently 140k) would the monthly interest go down?

ive read something in my mortgage paperwork previous about overpayments not coming of the balance just put as a credit?

assuming if they will continue to charge me an intrest payment every month based on the 140k then its not worth my while?

MortgageFreeMimi

If you tell the bank you need to make an overpayment (do it in branch so no questions go unanswered) against the interest only part of your loan, your monthly payment will definitely be lower.

My mortgage was initially £52k repayment and £100k interest only over 10 years. I took it out while temping in 2009 and could get nothing else. I'm now on the svr as it allows all OPs and I'm in a new job with commission but (that aside), everytime I make an OP, I make sure it's only affecting the interest only bit and for every £500 (the minimum OP I can make) I get approx £1.95 off my monthly payment. Used to be £1.60, so god bless compound interest!

Good luck!

lilylaren

thank you for your reply.

when you say go into the bank how would that work with a non high street lender?