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Overpayments and interest
zenshi
Posts: 1,133 Forumite
I have just swapped to a fixed rate deal today and totally forgot to ask how over payments work.
I know what the yearly limit is and will make overpayments to my interest only part but how/when is the interest calculated for that?
Yearly? Monthly?
I hope I explained that OK
I know what the yearly limit is and will make overpayments to my interest only part but how/when is the interest calculated for that?
Yearly? Monthly?
I hope I explained that OK
LBM.....sometime in 2013 £27,056. 10 creditors
June 20.....£7,587.....3 creditors left 72% paid
£26,200 on interest only part of mortgage (July 16)...will chip away £17,103
£49,200 repayment mortgage ( July 16) £37,764
June 20.....£7,587.....3 creditors left 72% paid
£26,200 on interest only part of mortgage (July 16)...will chip away £17,103
£49,200 repayment mortgage ( July 16) £37,764
0
Comments
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Interest will be calculated and charged monthly. The sooner you overpay the less interest you'll be charged.0
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So, if for example I overpaid £1000 of an interest only part of mortgage, then the following month my monthly payment would reflect this?
Sorry to appear dense but I've never ever made an overpayment beforeLBM.....sometime in 2013 £27,056. 10 creditors
June 20.....£7,587.....3 creditors left 72% paid
£26,200 on interest only part of mortgage (July 16)...will chip away £17,103
£49,200 repayment mortgage ( July 16) £37,7640 -
Do you want your monthly payment reduced after you've made lump sum overpayments?0
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I just don't know what would happen. I would effectively owe less, that's why I askedLBM.....sometime in 2013 £27,056. 10 creditors
June 20.....£7,587.....3 creditors left 72% paid
£26,200 on interest only part of mortgage (July 16)...will chip away £17,103
£49,200 repayment mortgage ( July 16) £37,7640 -
If you can afford to keep the monthly payment at the original amount, ask them NOT to reduce it then you're effectively overpaying a bit more each month and it doesn't count against any maximum overpayment limit.
Your key facts document should explain a bit about overpayment, if in doubt, give your lender a call :-)Mortgage Free thanks to ill-health retirement0
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