Right time to overpay Mortgage

GalaxyStar

Hi all, just a quick question! We are planning on over paying our mortgage once we have added some more to the saving pot but having read about doing it at the right time for the interest I'm a bit confused. I've read that it's best if you're on a daily interest mortgage and it doesn't matter as much when you send the payment with this type.

We are on a 5 year fixed term mortgage (we have checked the rules on overpaying and we can to a certain amount) and upon asking the bank our interested is calculated daily but applied monthly. Does this mean it doesn't matter as much as to what day we send the payment?

JimmyTheWig

Correct. If it is calculated daily then it doesn't matter when you make the payment.
The only thing to watch out for is the effect of the overpayment on an existing direct debit. I've had the scenario before where I've made an overpayment about a week before the direct debit has gone through. The bank thought this was my regular payment and so didn't take my direct debit. They said that if I had left longer between the overpayment and the direct debit going out they would have had time to mark it as a capital repayment and still taken the direct debit.

JimmyTheWig

Well yes, that's what I mean. It doesn't matter as in you can't make it too early.

GalaxyStar

Thank you!