Should I overpay on fixed 10 year mortgage?

Carolibo

I started a 10 year fixed rate mortgage with Nationwide in February this year. The entire mortgage will be paid off at the end of the 10 year term. I know that I can make overpayments up to 10% of the loan amount, however,  I'm struggling to understand if overpaying by the allowed 10% per year will still reduce the term of the mortgage - does the 10 year fix apply only to the interest rate or can I only pay it over 10 years- can I still complete the mortgage early without penalty as long as I don't exceed the annual overpayment allowance?  

Edi81

The 10 year fix is the interest rate. 

In your offer it should have set out what your annual overpayment (if any) can be. Typically it’s 10% of original loan but best to check. 

If you can make overpayments without incurring ERCs then you will pay less interest overall and so is worth it. 

getmore4less

What rate?

penners324

It's usually 10% of the capital element on the anniversary date or 31st December each year.

amnblog

Carolibo said:

can I still complete the mortgage early without penalty as long as I don't exceed the annual overpayment allowance?  

This
Just keep in touch with Nationwide (you are now in bed with them for the rest of the decade) and check you are not exceeding your limits before you make any large overpayments.

getmore4less

if you can make overpayments without them recalculating the payment  then it could be paid off sooner.

If they recalculate it will be trend back to 10years just on a much smaller amount with a smaller payment