Mortgage overpayments and decreasing term life assurance

mkman150

Hi There,
I have been overpaying my mortgage and also have decreasing term life assurance. The policy and mortgage are both via Nationwide.
My question is, I assume the decreasing term amount of cover is based on making the standard mortgage repayments? If so then what happens if mortgage capital is reduced faster by overpaying?
Thanks,
Rob.

strawb_shortcake

You would have a surplus of cash should you receive a payout from the life assurance. Most life assurance is calculated with an 8-10% interest rate so it reduces slower than your mortgage anyway. 

mkman150

Many thanks for your reply Anna, most helpful. Nice to know that the mortgage would be paid off and the surplus would be paid out to the surviving person. 

Thrugelmir

You might one day stop overpaying and adjust your monthly payments back. At least provides flexibility. How much is the term assurance a month?