Overpaying on Mortgage Help

simplelivingcottage

Hello,

I am looking at overpaying on my mortgage, we have the allowance of 10% so that is what I'm hoping to do, I'm also wanting to put extra away to see when our rate is up if I can drop a lump sum on it, but that's a question for another day. I'm just unsure when I can do it. Is it best to pay a bit weekly, monthly or do I put a load on at the end of the year? We've just re-done our fixed rate for another two years if that helps.

Many Thanks

Nessy

TrickyDicky101

The earlier you make the overpayment the more interest you will save. So if you have the funds available now (and no other equally important use for them) then use to overpay - this opinion might be different if you can earn more interest on savings (that would otherwise be used to overpay) than it costs you (in interest expense) on your mortgage.

Boredatwrork

In regards to the mortgage OP's, as much as quick as you can is the most efficient in most cases, as interest is calculated daily by the lender.

In regards to putting in extra when the rate is up, if you think you will have over the agreed 10%, when you come to the end of the latest fix, instead of moving from one deal to the next, ask if the deal can start a few days later (check with your lender), then the day you fall onto the SVR, make the overpayment, once this is cleared and you have your new lower balance, then get the new deal. This way you then also keep your 10% for the new deal. The downside is the few days you are on the SVR the interest is a bit higher, but oits only for a couple of days.

Check with your bank all this can be done, I did with my bank they are fine with it, as im not moving lender they don;t do any further checks, just literally put you on the new rate.