Interest-Only Mortgage Query

Wikikenkey

I have an interest-only mortgage with 8 years left to clear.  The balance at the moment is £126,000.  My mortgage is currently £257.00 a month.  I have two options: (a) Would it be better to overpay each month (I am not sure if one can overpay an interest-only mortgage, and does this reduce the interest or the capital), or (b) pay an initial lump sum of £30,000 and thereafter, lump sums of approximately £12,000 a year till the end date?  (I have checked with mortgage company and I can make lump payments as frequently as I wish without penalty.)   I do not want to extend the term.  What would be the better route to get the balance down quicker?  Or is there another option?  Thank you. 

tlc678910

As long as there are no penalties for overpaying (some mortgages limit overpaying without penalty to 10% of the debt each year so check) then the sooner you pay the extra money the sooner you start saving interest.  E.g. If you owe 100k you are paying interest on 100k. Pay off 10k and you will start to pay interest on only 90k.
The caveat is that you probably cannot get your money back when you have paid it so in these uncertain times make sure you have a good fund for emergencies such as job loss before overpaying.

Thrugelmir

Yes you can overpay your mortgage. By reducing the debt owed, ie capital balance , the interest charged will fall. Interest is calculated daily and charged monthly. The sooner you overpay the more interest you'll save. 
Who is you lender currently? 

MovingForwards

https://forums.moneysavingexpert.com/discussion/6175369/interest-only-mortgage-query#latest

Answered on your other thread.