Paying off mortgage strategy

jumperabv3

My mortgage lender says on their website:

If your lump sum payment is £1000.00 or more in addition to your normal monthly repayment we will calculate a new mortgage payment for you and will write and confirm this to you.

Does it mean it's worth paying £995 every month or £1,005 every month in the long term? (assuming it remains fixed on £995 or £1,005 every month).

lspell1

Probably £995. I've read this same as you: if you overpay less than £1,000, the overpayment will reduce your term (which is what most people want). If you overpay more than £1,000 then the overpayment will reduce your repayment and your term will stay the same.
You should be able to contact the lender and request any overpayments are taken from your term as oppose to the repayment, but this will depend on the lender.

Thrugelmir

lspell1 said:

Probably £995. I've read this same as you: if you overpay less than £1,000, the overpayment will reduce your term (which is what most people want). If you overpay more than £1,000 then the overpayment will reduce your repayment and your term will stay the same.

The term will remain the same. The amount that that is required every month to repay the mortgage will be recalculated. 
Changing the term may require an affordability assessment on the part of the lender. 

Young_worker

If you just repay the same amount every month (e.g. 'original' normal mortgage payment plus your £1k overpayment) then it won't matter as over time the normal mortgage payment will come down and the overpayment 'element' will go up. If though you were just going to repay a fixed £1k per month + normal payment then over time the normal payment will come down so that your term stays the same. So if you were trying to pay off the mortgage early and were always going to pay the 'normal' payment + fixed overpayment i would only overpay £995.
Personally i just keep my total payment the same each month, so that my normal payment goes down each month and my overpayment increases each month. 

strawb_shortcake

We over pay our mortgage in lump sums, we have to pick whether we want it to reduce the term or the monthly payment. My friend on the other hand does the same and they have no choice other than reducing the payment. 

jumperabv3

Thanks for all the suggestions and insights, they're all very helpful.

Sistergold

Thrugelmir said:

lspell1 said:

Probably £995. I've read this same as you: if you overpay less than £1,000, the overpayment will reduce your term (which is what most people want). If you overpay more than £1,000 then the overpayment will reduce your repayment and your term will stay the same.

The term will remain the same. The amount that that is required every month to repay the mortgage will be recalculated. 
Changing the term may require an affordability assessment on the part of the lender. 

With regards to overpaying the term will change without need for an affordability assessment this is because mortgage term has reduced due to a reduction in amount you now owe. But if you just went on to say you need to change term then affordability issues kick in.