Overpayments

whatsthatabout

Ive read on the site about when in the month to overpay and im a little confused, I thought the any overpayment would reduce the mortgage, we currently have
£175,177 over 13Y and 1 month ,  payments are £1324 a month on a 10 year fixed with Barclays,  we overpay by £300 a month so £1624.00 which comes out the same time as the mortgage , is this ok, or should I move the overpayment date to before the mortgage payment,  thank you for any reply in advance? 

pramsay13

Overpayments can either reduce the amount or reduce the term. You should speak to your mortgage provider.
There is normally a limit to how much you can overpay (10%?) but you are well within that.

whatsthatabout

Thankyou Pramsay13 so in your opinion what's best ? reduce amount or terms?

whatsthatabout

and does it matter in the month when I pay?  thanks

caeler

whatsthatabout said:

and does it matter in the month when I pay?  thanks

That will depend on how your interest is added. 
I personally choose to reduce the term when I overpay.

pramsay13

There are overpayment calculators so you can see the impact it will have.
It is usually worth paying as soon as you can in the month as interest is often calculated daily even if it is only added monthly.

whatsthatabout

thankyou,  can you elaborate ?

pramsay13

whatsthatabout said:

thankyou,  can you elaborate ?

not really, not without knowing a lot more about you. You will need to do a bit of your own research.

whatsthatabout

what's the point of the of the forum,  if you done respond to questions !!!!!! 

pramsay13

You will get tips and pointers but ultimately you have to do the research to see what is best for you. 
You will not get people here to make decisions for you.

zemarcopolo

Mortgage interest is charged daily,  therefore,  the sooner you overpay the better. That is to say the best day to overpay is the day you get the money. 

Regarding reducing term or monthly payments,  it is a matter of choice. Generally,  reducing the monthly payments gives more flexibility and allows you to diversity your income in other investments. Although others may prefer the psychological feeling of a shorter mortgage term. 

I would go for reducing monthly payments and I would overpay without delays as soon as I receive the amount that could be used to overpay.