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Small mortgage - Reduce term or keep as is?
millie_chops
Posts: 4 Newbie
Hi all
My fixed rate ends at the end of June. When it does I’m going to pay a lump sum against the balance which will bring it down to somewhere in the region of fourteen (14) thousand. Just going to stay on my lenders SVR of 6.49% as I’m hoping to make regular monthly overpayments and have it paid off asap. Hopefully within 12 months.
My question is. When I make the overpayment (which will be on the first day of the new rate) do I just ask them to keep the remaining term the same - around 6 years. Or do I ask them to reduce the term? Does it make any difference?
If I keep the term as is then the monthly committed payment would be very low and I would overpay. If I tell them to reduce the term to say two years then the payment would be high.
My fixed rate ends at the end of June. When it does I’m going to pay a lump sum against the balance which will bring it down to somewhere in the region of fourteen (14) thousand. Just going to stay on my lenders SVR of 6.49% as I’m hoping to make regular monthly overpayments and have it paid off asap. Hopefully within 12 months.
My question is. When I make the overpayment (which will be on the first day of the new rate) do I just ask them to keep the remaining term the same - around 6 years. Or do I ask them to reduce the term? Does it make any difference?
If I keep the term as is then the monthly committed payment would be very low and I would overpay. If I tell them to reduce the term to say two years then the payment would be high.
I’m thinking I should just keep the term as it is but overpay but I’m not sure if I’m missing something? At least if I keep the term as is and something happened to me financially I could just make the low monthly committed payment.
Am I missing anything? Any advice appreciated.
Am I missing anything? Any advice appreciated.
Thanks
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