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Repayment or overpayment on Interest Only
marc-h_2
Posts: 146 Forumite
If you have a repayment mortgage that costs £1000 a month is that any different to paying £1000 a month on an identical interest only mortgage? So that would include say £400 interest payment a month and £600 overpayment? Does one cost more over the term of the mortgage? The mortgages are identical in every way except one is interest only and one is repayment. There are no penalties associated with either for paying it off or overpaying.
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Comments
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If you pay the precisely same amount in total every month on an interest only mortgage then you've a repayment mortgage.
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I was told different by a mortgage "advisor" at lloyds that many times that I started to question myself. She kept saying that with interest only mortgage your overpayments come of the balance whereas with a repayment mortgage it comes off what you owe! Whatever that is supposed to mean, she could never quite explain.0
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