When will mortgage overpayments make a difference?

mikeopvc

Just wondering if anyone can help explain this please?

Our mortgage payment is £797.74 pm and at the end of every month the interest is added on which is just above the £400 mark, £406, £419, £405, £416 and so on.
So basically we are still paying more in interest than off the balance.
I'm just wondering when it'll change and we'll be paying more off the balance than the interest added?
It's been less on the odd occasion such as February which I assume is because that's a shorter month but randomly it was less last November at £396
We have started making regular overpayments every month of £40 which I know is not even scratching the surface but I figured it's better than nothing and from time to time we will make a larger online payment, we just payed £500 off twice in March but that didn't seem make any difference either!
Are we wasting our time with these small overpayments or should we keep doing them?
Any advice appreciated
Thanks

skimper

http://www.moneysavingexpert.com/mortgages/mortgage-overpayment-calculator

If you put your detail in to here, it shows what effect overpayments have per year on your final balance. It wont show interest payments though.
If you overpay by £40 per month it will show how much overall you will save & how much time off the length of mortgage.

mikeopvc

I already have the mortgage calculator but it's not that easy for us to use as our mortgage is split into 3 sub accounts with different balances and rates!
Thank you anyway

Thrugelmir

mikeopvc wrote: »

I'm just wondering when it'll change and we'll be paying more off the balance than the interest added?

On a 25 year repayment mortgage somewhere in the region of 13-16 years. A lot depends on the actual interest rate over the period.

With no overpayments you could still owe 30% to 40% of the original capital balance after 20 years.

Are we wasting our time with these small overpayments or should we keep doing them?

Keep doing them. Have you ever rolled a snowball? While the rewards may seem small. The compounding of interest saved over the years will add up. Pay in whatever you can when you can. The debt only has to be repaid once.