Is it Cheaper to Overpay or Pay a Lump Sum

lofidelity

Hello,
we have a £70k Interest Only mortgage at 4.59% and have inherited money that allows us to pay it all off. However, when we run checks on Overpayment Calculators, it seems to show that paying £70k in one go will save us £29k interest, but that £60k and also £50k in one go will save the same amount of interest. But also, if we pay only £20k in one go and overpay £500 each month, it will also save £29k in interest. Can that be correct? Our heads are spinning. Does it mean we'd be better to pay just £20k now plus £500 overpayments and do something else with the rest of the money? Is the only benefit to paying off all of it, or most of if, in one go that we will be mortgage free sooner?
Thanks!

Thrugelmir

The sooner the debt is repaid the less interest you'll pay it's as simple as that. The benefit will come from not having a monthly mortgage payment to fund. This money you can do with as you wish. Saving the money will earn you interest for example. 

Edi81

Its interest only so if you may all of it off you will save 100% of the future interest.
If you pay off £20k you will save a quarter on a monthly basis (give or take). You will save interest no matter what. it all comes down to your personal circumstances particularly in the current climate as to how much of the mortgage you pay off.