Interest Only Vs Repayment?

dr1_2

WHAT IS THE BEST WAY TO REDUCE YOUR BALANCE ON A 2 YEAR FIXED RATE?
HAVING A REPAYMENT MORTGAGE OR PAYING INTEREST ONLY PLUS PAYING THE DIFFERENCE AVED EACH MONTH TOWARDS THE BALANCE AT THE END OF THE 2 YEARS?
WHICH GIVES THE LOWER BALANCE AT THE END OF THE 2 YEARS?

THANKS

missk_ensington

I prefer to have an interest only mortgage and "overpay" whatever you have left each month. That was some months you can just leave it as the interest only amount, other months when youve more money you can pay off more. I tend to pay off a lump sum ever 3-6 months. Each time you do this the repayments are recalculated so its sometimes easier to do it every few months or they might get annoyed at having to keep doing a new schedule....

Leighthal

dr1 wrote: »

WHAT IS THE BEST WAY TO REDUCE YOUR BALANCE ON A 2 YEAR FIXED RATE?
HAVING A REPAYMENT MORTGAGE OR PAYING INTEREST ONLY PLUS PAYING THE DIFFERENCE AVED EACH MONTH TOWARDS THE BALANCE AT THE END OF THE 2 YEARS?
WHICH GIVES THE LOWER BALANCE AT THE END OF THE 2 YEARS?

THANKS

I would imagine having a repayment mortgage AND overpaying whenever possible is the best way to reduce a mortgage.

djbd1973

Leighthal wrote: »

I would imagine having a repayment mortgage AND overpaying whenever possible is the best way to reduce a mortgage.

Payments on the repayment mortgage are always going to be higher than just the interest mortgage, and obviously have a higher impact on a monthly budget but if people on a repayment scheme can also afford to overpay as well, that the impact would be very good news indeed.