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unclear on implications of overpayments
snickpan
Posts: 186 Forumite
The overpayment calculator suggests that with a monthly overpayment of £200, at the end of 21yrs my interest only mortgage will have reduced by £80K, that makes sense as I would have literally paid that amount off the capital.
Looking at the details of the mortgage it says after an overpayment, interest will be recalculated - but to what end? It doesn't specify anything else.
Will the mortgage payment be reduced each month, (but my overpayment stays the same)?
Will the payment stay the same, but the capital will be reduced a bit more than the physical £80k I've overpaid?
Just what does that interest recalculation suggest?
Looking at the details of the mortgage it says after an overpayment, interest will be recalculated - but to what end? It doesn't specify anything else.
Will the mortgage payment be reduced each month, (but my overpayment stays the same)?
Will the payment stay the same, but the capital will be reduced a bit more than the physical £80k I've overpaid?
Just what does that interest recalculation suggest?
0
Comments
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It means you'll pay less interest as the capital Is less.
Whether your monthly payments are recalculated or stay the same, depends on your lender.0 -
Oh yes, I've looked at it again, the MSE overpayment calculator says I'll be £80k better off, despite having only paid £50k extra in overpayments.
(I was totally wrong, I was assuming I'd paid an extra £80k, but would only have paid an extra £50k - maths!)
Thankyou.0
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