Overpayment help

Lemonsqueezer78

If you paid off £10k and your repayments stayed the same - then you did in fact reduce the term, whether they spelled that out to you or not. Its not possible to pay £10k off of your mortgage and not have at least one of those 2 things happen.

Lemonsqueezer78

One thing some folks like to do is over pay their mortgage and keep their term the same - and have their repayments gradually lowered. However to keep the rate at which they overpay their mortgage the same, the also gradually increase the amount of their over payment each month (or at regular intervals) in line with the lowering of their repayment amount. That way, their underlying mortgage payment is going down but they continue to pay off their mortgage at the same accelerated rate - and should life ever throw them a financial curve-ball (e.g redundancy) - then they could - if they needed to - suspend their over payments for as long as they needed to AND benefit from the smaller contractual repayments on their mortgage during this time.

getmore4less

confusion arises because the term "reduce term" has multiple meanings depending on context.

The important one is the contractual term to have that change usually requires a review.
When lenders say overpayment reduce term they often mean keep the payment the same NOT reduce the contractual term.

RichUK18

Thanks everyone for all your help, it's all a bit clearer now!