Mortgage Overpayments

Hayley_222

Hi, I wonder if anyone can help me -


My current mortgage deal has finished and I have reverted back to the standard rate of 3.99%. I am going to sign in to a new 2 year fixed at 2.19%. I'd like to pay a little extra off in a lump sum payment, between £1,500 and £2,500. This money will come off the borrowed amount and not just pay interest I hope?


Should I pay this amount whilst I'm at 3.99 or switch to 2.19 and pay it off? I save more interest by paying at 3.99 but that's only because there is more interest to pay right?!


I'm a little confused...


Also, as far as I'm aware the interest is calculated daily, but I'll check that.


Thanks in advance,


Hayley

amnblog

You would expect to pay off the lump sum and then take the fixed rate Hayley.


Either your mortgage lender or a mortgage broker will advise you on the correct way to make this happen.

Hayley_222

Amnblog, thank you for your reply. Is paying the lump sum at the higher rate a better option then?

lee111s

It makes no difference as it'll come off the capital regardless.

getmore4less

With any payment(daily interest) the sooner you pay it the better as long as there are no penalties.

nalinigooneratne

We have a lifetime Equity release motrgage. which we took 8 yrs ago . We would like to get out of this because the interest is accumulating very rapidly . How can we burrow 50000 pounds to repay this . we are,unfortunately , retired but currently with a total income of about 50,000 annually. any advice would be welcome.