Overpayment

Essieess

Hi everyone, first time posting. I have 8 years left on my mortgage through overpayments. It’s a repayment mortgage at 2.77 percent. There are no penalties for overpaying. 

I can now afford to pay about £750 per month overpayment. I also pay an extra £133 per month extra as part of my direct debut from my mortgage company. 

I went to pay my £750 yesterday And the lady said if you can afford to pay £1098 which is 3 x my mortgage amount then that’s better because they can recalculate my mortgage and I can either reduce the term or the monthly payment. I just want to get this mortgage paid as soon as. She also said to wait while I have a bigger lump sum and pay it then because I would notice more of a difference. Interest is calculated at a daily rate and it’s a buy to let mortgage. 

I guess my question is does it matter how much I pay and when I pay it if my plan is to be mortgage free ASAP? Should I be waiting till I have 3 x the amount or should I just throw whatever money I have at it regardless of how small the amount is. Just to add, I have savings so I can afford to overpay. 

Thanks in advance. This overpayment malarkey is making no sense to me! 

Zola.

I am on a fixed rate... After I agreed to the terms, I waited a month, and then I arranged for the direct debit to be 300 quid more  on top of our contracted rate.. and it comes out every month. That way if I need to adjust it, I can lower it again, rather than being on the hook for a higher payment no matter what. 

Essieess

Hi zola, thanks for the reply. I forget to say I don’t plan to change the amount just the term. I have a guaranteed income for at least another 4 years so I have worked out I can pay the extra £750 regardless of what happens. I just can’t quite how to do it. I thought I would overpay and that would be it, the lady really confused me!