Mortgage Over Payments.

TimandSarah

Good Morning,
I have an Offset mortgage with the interest charged daily that I pay over payments on when I can. The mortgage is recalculated on the 31st December every year.
My question is, I am now going to just pay a one off single lump sum to the maximum I can for that year so when is the best time to make my maximum over payment? At the start of the year in January or just before it’s recalculated in December?

getmore4less

Just stick the funds in the offset account ASAP. 

Overpayments that come from the offset pot makes no difference 

TimandSarah

Hi sorry I should have explained a bit more. I have saved in my offset account £1.00 less than I owe on my outstanding mortgage figure and so I’ve reached the maximum benefit on that, so my overpayments come from another savings account.
I thought over payments on your mortgage are a good thing and so I wanted to know when best to time that payment?

getmore4less

If you overpay from elsewhere then you have to reduce the offset account to stay the same 100%(-£1) offset

In effect you are mortgage free you don't pay any interest if 100% offset and have access to the offset fund if you need them at the mortgage rate.

overpaying does nothing.

which lender?

TimandSarah

My lender is Coventry Building Society and I over pay so I can finish paying the mortgage sooner.

TimandSarah

Since I transferred to this Offset mortgage in Dec 2018 I have saved £1674.00 in interest according to my end of year mortgage statement.

getmore4less

If you have 100% offset in the account you can finish it now.
Overpaying does nothing other than move money from the offset account to pay down the debt.

TimandSarah

I couldn’t pay it all off now (£46,000) due to the early repayment charge and the fact I need access to the money in the offset account in case of emergencies.
Otherwise I would have to then build up my savings from scratch?

getmore4less

Just save the money you are using to overpay. 
The mortgage is costing nothing while offset it is in effect paid off already.