Reduce payment or term?

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  • OldSmithy
    OldSmithy Posts: 34
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    I’m with NW and payments over £500 have the option to reduce the term or monthly payment. You can set it through your online access if you have this. 

    I always thought/understood that reducing the term was the best option to clear it down early. However we are on the base rate now and have been overpaying for a number of years such that we have built up quite a reserve. Now that the mortgage is much lower we have just increased our repayment period out to when we are 67. This has reduced our monthly payments and I’m continuing overpaying to try and get the mortgage payment eventually to £10 per month!  At this level the interest charges will be minimal but it will mean we always have the option to call back our overpayments until the end of the mortgage term (age 67). Hence, I don’t mind this interest charge to have the facility to access all of the overpayments in an emergency. 

    I am on the old base rate system (BMR) though and think it may have changed in recent years so perhaps you can then only take a payment holiday rather than ask for it back?
  • Rawdinae
    Rawdinae Posts: 5
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    Forumite
    I was looking at taking advantage of interest rates and re-mortgage still have the dilema of gining up my OP's buy back and payment holidays facility although my goal is to clear my remaining £50k currently on 2.10% on my Nationwide - my dilema is take a risk on a new 2 year deal at say 1.28% then end up on 3.59% Standard hoping to get a new deal or go for a 10year deal (only 11years 7 months outstanding) and still repay upto 10% OP but not sure about hitting ERC towards end of deal does that still apply with Nationwide? or I could just continue to OP on BMR not sure which route is best value to help achieve my goal to clear? any thoughts?
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