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Mortgage overpayments
Sunrise27
Posts: 42 Forumite
We have a £14000 repayment mortgage over 10 years at a rate of 1.69% fixed for 3 years and then £8000 on interest only at the same rate.
If i want to start overpaying this which bit am i better off doing it on the repayment part or the interest only part ?
Thanks in advance
If i want to start overpaying this which bit am i better off doing it on the repayment part or the interest only part ?
Thanks in advance
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Comments
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I would start by overpaying on the £8000 - check the T&C's of that mortgage though to make sure if you can and by how much per month/year.0
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Makes no difference.
But since one will take care of itself, you might want to target the interest only one.0 -
Thank you. I can pay 10% off each year I checked yesterday0
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The maths on how much interest you will pay is identical either way. The difference between the two is that you may struggle to get an interest only mortgage in the future if they continue to fall out of fashion so there’s a chance that you make your life simpler and give yourself more options if you pay down the interest only one first, which is what I’d do.
Check the exact details of the overpayment allowance to make sure you don’t go over and get hit with charges.0 -
Thank you . That makes sense0
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the other side to this.
If you over pay the repayment you can reduce your min contractual payment giving future flexibility.0 -
Overpaying the interest only part would at least give you an objective to achieve, i.e. clearing the debt.0
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Thank you. I can pay 10% off each year I checked yesterday
I'm intrigued, is the 10% over payment limit on the balance of each part of the mortgage (so 10% of the £140K & 10% of the £8K) or 10% of the overall total of £148K?
As 10% of £8000 is obviously not going to be much and would determine how you play this
Either way good luck in your mortgage reducing journey
TeameffortEmergency fund saved, we did it!!
2020 #140 MFW £10,250.25/£9,500.00
2019 #490 MFW £ 9,964.78/£9,600.00
2018 #143 MFW £ 6,903.63/£6,500.00
MFW balance as at 31 Dec 19 77,875.00. Original end date 2043 :eek: goal 20230
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