Lower Rate if I overpay my Mortgage??

Darren_K

Sorry probably a basic question but I get myself confused

I am about to find a new mortgage deal and some of the rates I have been offered on a 2 Year Fixed are:

1.69 % (Without £999 Fee)
and
1.31 % (With £999 Fee)

at the moment the best deal seems to be without the fee albeit by a small amount, however my question is regarding the rate and the fact I overpay is where I get confused, if I overpay to bring the actual capital down am I losing out because I am choosing the 1.69% because the interest is higher on the balance if that makes sense?? e.g. payment is 550 I pay 800 to help bring it down over the course of 2 years does this make much difference?

Thanks

Edi81

How much is the mortgage?
Without that impossible to say.
The higher the value the more likely that with fee is better overall.

getmore4less

Higher the payment the bigger the mortgage needs to be to break even over 2 year.

Need amount borrowed and planned payment to work it out.

amnblog

Looks like the fee option only starts to look favourite at around £130,000 of lending.

If you are overpaying, that increases the benefit of the fee save option as the lower the outstanding balance, the smaller the impact of the higher rate.

getmore4less

With a £500pm payment breakeven closer to £137k

Darren_K

Hi the amount borrowed is £158,800 - Overpaying by bringing the payment up to £800 per month, so Deal on one is £560 Per month @ 1.45% but the other one is £575 Per month @ 1.69

Thanks in advance