Mortgage overpayment help needed

Thejinkazama_2

Hello,
My partner and I are in the lucky position of looking to overpay on our mortgage. At present, we have a repayment mortgage with just roughly 131k left to pay.

I contacted our mortgage company who advised that we can pay back £13,800 before our anniversary at the end of March this year. The calculations would then be done again and we would have a new maximum overpayment figure available from April this year until April next year.

We have around £20k which we could use to overpay. In order to reduce interest as quickly as possible, what is the most financially savvy way to divide the 20k up in lump sum payments (one before April and one after)?

Thanks

K_S

@Thejinkazama_2 Assuming the overpayment allowance resets on 1st April and assuming the interest is calculated daily (which is what the vast majority of lenders do nowadays), the one that would save the most interest on your mortgage should be to pay £13,800 today and the £6,200 on 1st April.

The new fee-free overpayment allowance will most likely be 10% of your opening balance on 1st April, so the £6,200 should be comfortably within that amount.