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Overpayment- monthly vs lump sum
m12-c4
Posts: 9 Forumite
So I’ve planned on overpaying by £100/month when I start my mortgage (5 year fixed rate) but still have money in savings so I thought is it worth paying the £6000 as a lump sum (£100/month x 5 years) but when I did the overpayment calculator it makes a huge difference but I can’t understand why. Will someone explain…or am I missing something?
0
Comments
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The £100 per month is assuming you overpay £100 for the full term of your mortgage, not just the first 5. Look at the row 5 on the tables to see how much you will be better off at the end of your 5 year fix - so £253 extra saved by paying the lump up front.1
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Thank you. This makes sense now.0
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