Interest only mortgage - overpayments or switch to repayment?

mills1983

Hello, we have an Interest Only Mortgage with now defunct Mortgage Express, and are now in a position to repay more every month. They offer the option of overpaying any amount every month (or not overpaying at all some months) or switching to a repayment mortgage.

Is there a benefit to going over to repayment (which is irreversible) or is it the same to overpay every month but retain the option to go back to Interest Only if circumstances dictate?

The rate is currently 2.5% and the mortgage is for £132,000

Any advice much appreciated!

AnotherJoe

I'd say go for overpayment, which gives you exactly the same effect as moving to repayment, but is much more flexible as you arent committed to the higher payments.

Thrugelmir

How many years does your mortgage term have left?

mills1983

thanks for the replies - 15 years left on the mortgage. I'm thinking overpayment option too as it means I can always stop the overpayments if needed.

getmore4less

overpayment more flexible.

just use a simple calculator to give you a target overpayments to aim for, full term or a rate rise or some reduced term of your choice

Recalculate as needed to stay ahead of the repayment curve.

http://www.whatsthecost.com/mortgage.aspx

£132k @ 2.5% 15y £880pm

but say you wanted 10 years and handle a rate rise of 1%
£123k @ 3.5% 10y £1305pm