Overpaying on a repayment mortgage - stupid question time

AdamBrunt

Hi all,
Stupid question time ... if you want to start overpaying on a repayment mortgage do you have to explicitly tell the lender that you want the overpayment to go towards paying off the capital rather than the interest ?

MEM62

The interest is fixed.  Therefore any overpayment will go to the capital.  (Unless, of curse, you have arrears in which case the overpayment will go towards clearing them)
Bear in mind that, with many mortgages, you can only overpay 10% of the outstanding capital before early repayment fees are applied.  Also consider that, if you are in he early years of your mortgage, investing any spare cash you have  in your pension will bring you far greater gains that any amount you save on mortgage interest with overpayments.        

Thrugelmir

Interest is calculated daily and charged monthly on the outstanding balance. By making additional payments you repay capital and reduce the amount you owe. With the effect that you pay less interest. 
If you maintain your standard monthly repayment while making overpayments you will naturally shorten the mortgage term. Though initially progress may seem slow. Akin to rolling a snowball across the ground momentum takes time to build. 

MovingForwards

https://www.halifax.co.uk/mortgages/mortgage-calculator/overpayment-calculator/

This is what I use to see how much it reduces the outstanding mortgage.

AdamBrunt

Thrugelmir said:

Interest is calculated daily and charged monthly on the outstanding balance. By making additional payments you repay capital and reduce the amount you owe. With the effect that you pay less interest. 
If you maintain your standard monthly repayment while making overpayments you will naturally shorten the mortgage term. Though initially progress may seem slow. Akin to rolling a snowball across the ground momentum takes time to build. 

So if you make a one-off overpayment of, say, £30k then the interest owed will automatically go down. So if you then keep the monthly repayment the same you are, technically, overpaying (just not by much). Is that correct ? And if so, will the lender automatically use the difference against paying off the capital ?