Overpayments to reduce payments and not term. 13 March 2016 at 8:08AM in Mortgage-free wannabe 6 replies 733 views

mrbg07546

Hi- was just wondering if there's any flaw in my tactic.

We are about to sign for a house.

We are paying 1220 mortgage a month(fixed for 5) and the mortgage is 27 years

If we over pay a lot in the first few months and we keep the term the same would I get the following benefits.

- less interest over term.
- reduced monthly payments so when I get income protection to cover mortgage I will need to cover less. So it de risks me going forward?

glentoran99

mrbg07546 wrote: »

Hi- was just wondering if there's any flaw in my tactic.

We are about to sign for a house.

We are paying 1220 mortgage a month(fixed for 5) and the mortgage is 27 years

If we over pay a lot in the first few months and we keep the term the same would I get the following benefits.

- less interest over term.
- reduced monthly payments so when I get income protection to cover mortgage I will need to cover less. So it de risks me going forward?

Are you able to overpay enough to make a difference? most fixed deals have a maximum overpayment

mrbg07546

Nationwide overpayment? 10%

mrbg07546

mrbg07546 wrote: »

Nationwide overpayment? 10%

Is it 10% a year?


So if mortgage is 100k you can pay 10k over lament per year??

KFW

Hi,

I believe its 10% of the initial borrowed amount per mortgage year. Called them on the helpline a few days ago

KFW

mrbg07546

So that is pretty generous and could make a big difference I guess??

A_Frayed_Knot

KFW wrote: »

Hi,

I believe its 10% of the initial borrowed amount per mortgage year. Called them on the helpline a few days ago

KFW

[email protected]@x is 10% of balance at beginning of each year.