Help on overpayments please to be mortgage free asap 18 March at 11:29PM in Mortgage-free wannabe 5 replies 141 views

Emsabobs

Hi there, I’d like to overpay my mortgage by the maximum allowed but I don’t understand the wording. 

If I can OVERPAY 10% does that mean I can pay 10% over and above my agreed mortgage payments please? 

Emsabobs

Lots more detail to add but kind of need to know on this first before I can plan how many years it will take. Thank you 

BikingBud

You need to check the Ts&Cs they might say 10% of outstanding balance per calendar year, or similar.

Emsabobs

Thank you.

It’s hard to explain what I mean but I just wondered if it’s usually 10% on top of my mortgage payments or 10% including them. 
So if my mortgage is £100,000 and I pay £500 a month as my fixed mortgage payment, can I over pay £10,000 ON TOP OF my £6000 a year mortgage payments? 

BikingBud

Yes

I would say if you start with 100k you can pay off 10k as overpayment and then 6k as 12*£500 and then next year £8400 and 12*£500. Those early lump sums smash into the total interest payable but also consider if saving might be the better option.

But check your agreement to see if it is calendar or mortgage anniversary.

Emsabobs

Thank you very much. I will do. 

Edit - I’m planning on paying any extra as overpayments rather than a lump sum.