overpaying on my mortgage - reduce term or reduce monthly payments

Hi All,

Bit of background first
I'm a first time buyer and just completed on my first property.
I have a fixed 5 year mortgage borrowing £100,000 with Nationwide with a term of 25 years and I'm able to make overpayments each year up to 10% of the original borrowed amount. 

after checking all my finances I can safely make a one-off overpayment of the full 10% (£10,000) for this year.

When I called Nationwide to do this that offered me 3 options:

1. reduce my monthly repayments.
2. reduce the term.
3. leave everything the same.

I found this confusing as I thought after over paying the only thing that would change would be my monthly repayment amount. After doing some Googling it seems it is recommended to reduce the term as this will save me more in the long run. 

out of the 3 options above what are people recommendations ? 

my goal is to pay off the mortgage at the end of the 5 year fixed term or in the worst case scenario re-mortgage.


  • DiseasedBunny
    DiseasedBunny Forumite Posts: 318
    Fifth Anniversary 100 Posts Name Dropper
    Reduce the term- simples

    Ie you now owe 90k instead of 100k, therefore you pay less interest, and so you will be paying more of the capital off each month
Meet your Ambassadors


  • All Categories
  • 340.2K Banking & Borrowing
  • 249.1K Reduce Debt & Boost Income
  • 448.3K Spending & Discounts
  • 232K Work, Benefits & Business
  • 603.2K Mortgages, Homes & Bills
  • 171.6K Life & Family
  • 245.2K Travel & Transport
  • 1.5M Hobbies & Leisure
  • 15.8K Discuss & Feedback
  • 15.1K Coronavirus Support Boards