Mortgage overpayment refunded

Fluffyteddy

Hi 

We have been overpaying our mortgage for the last 3 years and have now remortgaged and managed to cut the remaining term down from 36 to 25 years. We were with Barclays and they kept the overpayments in a separate account and with changing providers they have told us that this will be refunded to us - around 5k. 

Me and my husband have differing opinions

- I want to use the refunded money to do our driveway which really needs doing

- he says we should just overpay the new mortgage with the lump sum which would further reduce the term by probably another year which would save interest in the long run. 

My argument is we have already cut the term by 11 years and this is a job we keep putting off but really needs doing. 

Do you think we would be better off putting it back on to the new mortgage to further reduce the term or using it for a home improvement?

Thanks

Hoenir

New driveways look great initially. Soon start sinking under the weight of cars these days.  Weeds growing up etc. No shortage of people making a good living laying them either. 

grumpy_codger

Fluffyteddy said:

We have been overpaying our mortgage for the last 3 years and have now remortgaged and managed to cut the remaining term down from 36 to 25 years. We were with Barclays and they kept the overpayments in a separate account and with changing providers they have told us that this will be refunded to us - around 5k. ...

If the term was reduced as a result of overpaying £5K, I don't understand how it can remain reduced after you get £5K back. Also, it's hard to believe that this relatively small overpayment could reduce the term by 9 years.

What are the old and the new interest rates? Are your new monthly payments noticeably bigger than the original ones?