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Overpayment Query
crazylady_012
Posts: 34 Forumite
Hello,
We are overpaying every month on our mortgage. I am trying to figure out which is better, to use the overpayment to reduce the term or use the overpayment to reduce the minimum monthly payment. As standard our provider changes the minimum monthly payment so effectively our overpayment increases each month.
However, we pay a £720 (including overpayment as our current minimum monthly payment is £454).
So I just wondered if anyone knew which was better to reduce, the payment or the term?
I've read a lot of threads on this but no one seems to know the answer or they get confused by the question!!
We are unlikely to need to cancel the overpayment any time soon, and if we reduce the term by using the overpayment, our minimum payment should not go up. However, if we reduce the minimum payment with our overpayment, then effectively our overpayment is going up.
Hope my question is clear. Any advise appreciated.
Thanks.
We are overpaying every month on our mortgage. I am trying to figure out which is better, to use the overpayment to reduce the term or use the overpayment to reduce the minimum monthly payment. As standard our provider changes the minimum monthly payment so effectively our overpayment increases each month.
However, we pay a £720 (including overpayment as our current minimum monthly payment is £454).
So I just wondered if anyone knew which was better to reduce, the payment or the term?
I've read a lot of threads on this but no one seems to know the answer or they get confused by the question!!
We are unlikely to need to cancel the overpayment any time soon, and if we reduce the term by using the overpayment, our minimum payment should not go up. However, if we reduce the minimum payment with our overpayment, then effectively our overpayment is going up.
Hope my question is clear. Any advise appreciated.
Thanks.
0
Comments
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The only thing that matters is your total payments, that is what determines the real term of your mortgage.0
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If the minimum monthly payment reduces then you always have flexibility as to how much you pay in any given month.0
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