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Overpayment advice

stuartm
Posts: 78 Forumite


This is probably an easy one but I'd like to get some view on whether I'm maximising my benefits with the following please.
I have a mortgage which is £115k, of which approx £70k is interest only and the remaining £45k on repayment. It's a 5 year fix at 2.39%.
There are 7 more years left to run on the mortgage which is approx when I plan to retire.
I have some savings I'd like to use to overpay right now and can overpay up to £11k without penalties.
Is it more efficient to overpay the interest only part or the repayment part or the mortgage, assuming (as I will do) the monthly payments remain the same?
My gut feel is to reduce the interest only element, but it may be better to overpay the repayment part. I have other funds available to clear any remaining interest only mortgage debt in 7 years time though at the moment I prefer not to commit funds to the mortgage (and can't overpay more than approx £11k per year).
Any advice appreciated!
Thanks.
I have a mortgage which is £115k, of which approx £70k is interest only and the remaining £45k on repayment. It's a 5 year fix at 2.39%.
There are 7 more years left to run on the mortgage which is approx when I plan to retire.
I have some savings I'd like to use to overpay right now and can overpay up to £11k without penalties.
Is it more efficient to overpay the interest only part or the repayment part or the mortgage, assuming (as I will do) the monthly payments remain the same?
My gut feel is to reduce the interest only element, but it may be better to overpay the repayment part. I have other funds available to clear any remaining interest only mortgage debt in 7 years time though at the moment I prefer not to commit funds to the mortgage (and can't overpay more than approx £11k per year).
Any advice appreciated!
Thanks.
0
Comments
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I don't think it matters of your rate is the same across both and you won't get penalties.Mortgage Aug 2019 161,000 :eek::eek::eek:Nov 2019 156,500:T Jan 2020 153,122:T, Apr 2020 149,500, Apr2021 139, 675, Oct 2021 136,823, Dec 2021 136,120🙂EF 0/12,000 (0%)😕 (5062.44 was ERC), Jan 2023 128,650. Our Mortgage is never going to be as high as it is today. :jOnwards and downwards to a better life for our family. :jJust keep swimming0
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