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Overpayments help

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Hi everyone 

we hope to be in the position this year to start making overpayments. I’ve been on the overpayment calculator, my goodness when you see how much you can save / shorten your mortgage it really does spur you on doesn’t it. Anyway, I am assuming like most people we will have a 10% limit on overpayments each year. We owe £70k on our mortgage and each year that 10% overpayment is going to get smaller.  how do we get the mortgage down if we can only pay overpayments of 10%. Haha sorry if it’s really obvious but can I ask what everyone else does please. Thank you 😊 
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  • Sncjw
    Sncjw Posts: 3,515 Forumite
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    Mine is 10% of what we initially borrowed as we are in our first fixed deal . So it would be 10% of 71500 so would be 7150. Have a look on your annual statement or on your online account it should tell you. 
    Mortgage free wannabe 

    Actual mortgage stating amount £75,150

    Overpayment start date 1/3/23.

    Starting balance £66,565.45

    Current balance £63,787.16

  • set
    set Posts: 291 Forumite
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    Thank you for this.  Can I ask, let’s say we are a few years down the line and we only owe £50k but we can still only pay 10% overpayment, but we can afford £500 per month overpayment, that would take us over 10% would we be better off reducing the term by a couple of years each time we remortgage? 
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  • themadvix
    themadvix Posts: 7,981 Forumite
    Mortgage-free Glee! Photogenic First Anniversary Name Dropper
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    Yes. Once your fix has ended you can make an unlimited overpayment before refixing, so save the money in a good interest paying account and pay a lump sum off at the end of the fix. We are down to the last 20k now, so our annual OP in January wasn’t very spectacular! But large link will be paid off on 2nd June when fix ends. We’re then into tricky territory as to whether to fix and pay ERCs or stay on the SVR (but it is eye-watering at the moment) and get it gone asap.

     Bear in mind that depending on your rate, you may be able to save at a higher rate at the moment, which might be the better option.
    Mortgage free 16/06/2023! £132,500 cleared in 11 years, 3 months and 7 days

    'Now is no time to think of what you do not have. Think of what you can do with what there is.' Ernest Hemingway


  • set
    set Posts: 291 Forumite
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    themadvix said:
    Yes. Once your fix has ended you can make an unlimited overpayment before refixing, so save the money in a good interest paying account and pay a lump sum off at the end of the fix. We are down to the last 20k now, so our annual OP in January wasn’t very spectacular! But large link will be paid off on 2nd June when fix ends. We’re then into tricky territory as to whether to fix and pay ERCs or stay on the SVR (but it is eye-watering at the moment) and get it gone asap.

     Bear in mind that depending on your rate, you may be able to save at a higher rate at the moment, which might be the better option.
    That’s a great help thank you 😊 ah didn’t realise we could do that at the end of the fix thanks again 😊
    .
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