i made an overpayment

hi i hope this is the right area of forum to post this, apologies if not.
i had built my savings up,  so i decided to make a £10k overpayment to my mortgage.  i wasn't sure if i should have done this, but i do like idea of getting mortgage free quicker so think it is the right decision.   but it's done so i can't reverse this now.   
as a result of this overpayment,  my monthly amounts will now go down,   so i am considering reducing the term of the mortgage to increase the monthly payments again. 
in your opinions,  is this a good idea,  or would you leave it as it is?


  • Reduce the term. You will be better off in the long run.
    2017 - mortgage of £140,000 and interest rate of £10 a day
    Feb 2021 mortgage of £103000
    May 2021 mortgage of £100000
    July 2021 mortgage of £97000
    November 2021 mortgage of £93000
    July 2022 mortgage of £84000
    December 2022 mortgage of £79000
    December 2023 mortgage of £73000
  • FtbDreaming
    FtbDreaming Posts: 1,118
    First Anniversary First Post Name Dropper
    Well done! If you can afford the monthly payments as they are then I’d keep them and reduce the term. If you’d rather build your savings back up then keep the lower payment and put the difference into savings. 

    I’m obviously obsessed with the lower mortgage amount so I’d be keeping payments the same. Good luck
    Mortgage started August 2020 £69,700
    Mortgage ends Aug 2050 MFW: Aug 2027 
    Current Balance: £60,700
    MFW2020 #156 £723.13
    MFW2021 #26 £1184.71
    MFW2022 #11 £197.87
    MFW2023 £785
    MFW 2024 £174.73

    Determined to make it! 
  • If you reduce the term, your lender will probably want to do an affordability check, so you need to be sure you'll pass this. There will also be a fee to pay
    Mortgage start: £65,495 (March 2016)
    Cleared 🧚‍♀️🧚‍♀️🧚‍♀️!!! In 5 years, 1 month and 29 days
    Total amount repaid: £72,307.03. £1.10 repaid for every £1.00 borrowed

    Finally earning interest instead of paying it!!!
  • Why not keep the term the same and accept the lower monthly payment but make regular monthly overpayments ( providing there is no fees/charges for this). For example, if your original payment was £500 and as a result of your Overpayment your monthly payment went to £450, you could pay the £450 by direct debit and set a standing order to overpay £50 a month. The term will naturally reduce and you have the insurance that if for some reason you need the extra money you could cancel the standing order (rather than be tied into a higher monthly payment due to the fact that you have asked to reduce the term if that makes sense)
  • Martin recommends keeping the term the same, but overpaying regularly, on the basis that it'll have the same effect but you can stop overpayments whenever you need to - or at least he did in 2014, not sure if he'd have updated his advice since then. 
    Mortgage start date: 01/10/2021
    Original mortgage debt:
    Remaining debt (20/01/2024):
    Daily interest: £3.39
    Mortgage debt end of 2023: £101,528
  • L9XSS
    L9XSS Posts: 438
    First Anniversary Mortgage-free Glee! Name Dropper First Post
    Reduce the term, however it’s entirely up to you. You would want to factor in job security, pension provision and a few other factors to decide whether to have lower monthly payments and continue to overpay or see the overall term diminishing and continue to overpay.
  • caeler
    caeler Posts: 2,605
    Mortgage-free Glee! Photogenic Name Dropper First Post
    Great job on the overpayment @eastmidsaver You are in good company over in this part of the forum!  You'll find the diaries here of many users who are doing just that, all to be mortgage free.  Good luck with what you decide to do long term.  I've always overpaid to reduce the term, I don't think I ever considered the alternative.  After my first significant overpayment and getting the letter telling me what my new term was, I was addicted! 
  • great start, we also overpay monthly to reduce the term. At the moment each monthly OP reduces the mortgage term by 3 months 😁
    Nurse striving for financial freedom
  • getmore4less
    getmore4less Posts: 46,882
    Name Dropper First Anniversary First Post I've helped Parliament
    Just do regular overpayments if the payment has gone down,  review when you start hitting any ERC limits.

    Even then the savings are tiny for most people on short term fixes(<=5years) that hit the limit part way through their fixes.
  • hi all, thanks for your comments.  i will consider all of the suggestions.   part of me is thinking to reduce term to take it to the amount i was paying before which will reduce the term,   and then still overpay when i can (allowed 10%).
    but other part of me is thinking to enjoy the lower monthly amounts, and use that money to invest in myself a bit (as a reward), and i can still make overpayments anyway when i can (up to 10%)..  
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