Overpay Question

hufc2002

Hi all


When my 5 year fixed rate ended, I overpaid my mortgage for 42 months however I am now concerned after watching Martin Lewis' Money Show last night when he said make sure you shorten the term rather than reduce the payments.


I don't think I have done this.


Is there anything I can do?


Thanks

[Deleted User]

Yes. Find out what impact your overpayments had.

hufc2002

I know it has reduced the payments rather the term.

AnotherJoe

When you overpaid, did the amount taken via the monthly DD to the lender decrease each month, and if so did you increase your overpayments to compensate?

hufc2002

No. I overpaid by £220 per month. The payment never changed.

hufc2002

hufc2002 wrote: »

No. I overpaid by £220 per month. The payment never changed.

Does this mean my term or my payments have reduced?

lee111s

Essentially the term as your payments remained the same.

hufc2002

That's good however I am sure when I got my last statement the remaining term was still something like 21 years.


Initially a 30 year mortgage taken out in 2007.

[Deleted User]

The official term will not have changed. But the effective term will have reduced as a result of the overpayments.

Although I'm still not sure from your posts whether your payments reduced or not. Post 3 say they did, post 5 says they didn't.

getmore4less

The true term is determined by the payments.

You only need to really reduce the term when you will start hitting ERC with your overpayments.

mikeeboy

Usually a (relatively) small charge if you end up paying off early due to over payments.

I say usually... there is on mine.