Morgage overpayments??

rigsby1967

I read on here somewhere that depending on if the morgage interest is calulated daily, monthly or yearly depends on when best to make overpayments.

If calculated daily you can overpay at any time but what about monthly, when is it best to make overpayments if the interest is calulated monthly .

Thanks
rigsby1967

rigsby1967

Anybody??;)

MarkyMarkD

On the day before the interest bearing balance is fixed. Typically that will mean paying on the last day of the month is best - but that's obviously the date for cleared funds reaching the bank, so either pay by DD or allow time for clearing delays.

IveSeenTheLight

Per 1000 pounds overpayment, you are looking at a daily interest of approx 16.4 pence per day at an interest rate of 6%.

Assuming the interest is calculated monthly on your mortgage and you pay at the worst time (just after the calculation) then you are looking at a worst case missing out saving of 4 pounds 93 pence per 1000 you over pay for the month.

angelavdavis

MarkyMarkD wrote: »

On the day before the interest bearing balance is fixed. Typically that will mean paying on the last day of the month is best - but that's obviously the date for cleared funds reaching the bank, so either pay by DD or allow time for clearing delays.

I agree with Mark here. When you are overpaying your mortgage - every penny counts! Better paid off the mortgage than in the banks coffers!!