Advice regarding overpaying

Vicki116

Hi
I need some help regarding overpayments .
I took a mortgage out summer 2015 on a 30
Year term I’ve been overpaying the 10% every year and have also applied to reduce the term a few times so I now have 7 years left .
My 5 year fix at rate of 2.79 ends this August , I’ve just seen that if I make overpayments over the 10% they will
Charge me 1% of the payment .
So my question is , is it better for me to over pay the 10% and pay the 1% fee or keep it within the 10% and keep on track to pay the mortgage off with normal overpayments ?

Is there some sort of calculator that takes into account the 1% fee so I can see what I would be paying ?

Sorry for the long explanation

dimbo61

Well we also want to clear our mortgage ASAP but I would hate to give my Lender one penney more than I need too.
your 5 year fix ends in August 2020 so why not wait till then and build up savings in cash ISA,s or regular savers so you have a lump sum to clear more of the debt.
Well done on overpaying every year so far
Unless you interest rate is 5/6/7% wait

Tom99

Vicki116 wrote: »

Hi
I need some help regarding overpayments .
I took a mortgage out summer 2015 on a 30
Year term I’ve been overpaying the 10% every year and have also applied to reduce the term a few times so I now have 7 years left .
My 5 year fix at rate of 2.79 ends this August , I’ve just seen that if I make overpayments over the 10% they will
Charge me 1% of the payment .
So my question is , is it better for me to over pay the 10% and pay the 1% fee or keep it within the 10% and keep on track to pay the mortgage off with normal overpayments ?

Is there some sort of calculator that takes into account the 1% fee so I can see what I would be paying ?

Sorry for the long explanation

1% over the 7mths until August is effectively 1.7%pa instead of the 2.79% you are paying ie a net 1.09%pa saving. But since you can get say 1.4% on cash savings it's better to save the extra overpayment and pay it off in August.

getmore4less

Aug next year is around 7/8 months.

For every £100 left on the mortgage that's around £1.60+ interest.

The ERC will be £1.

What rate can you get on keeping it in savings?

Vicki116

Ok so do you think I should wait till fix
Is over and between swapping to new mortgage deal I could over pay extra and not have to pay the 1%?

getmore4less

It's not just overpaying you need to look at the ditch the fix calculation based on a much better LTV.

Probably should have done this sooner as the rate is high.