Overpayment in the first year?

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kenzie123
kenzie123 Posts: 88 Forumite
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in Mortgage-free wannabe
Hi

We purchased our first property in October 2017 - we have £260k to pay back for 30 years.

I am keen to start some overpayments as soon as possible - but we do have some home improvements to get on with as well - eg the kitchen needs modernising.

Is it best to over pay now with the money we have saved or do the kitchen first? We don't plan on this being our final home so have a few mixed opinions on whether we should over pay in the first place.

And - I wanted to confirm that the overpayments are definitely free of interest? I am sure they are but wanted to check!

Thanks

Comments

  • choccyface2006
    choccyface2006 Posts: 2,304 Forumite
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    Personally I would start the overpayment habit immediately, this is easier with some lenders (who take an increased direct debit) than others who insist on a minimum capital payment of, say, £500.

    I have been in both positions and it's so much easier to pay extra every month than wait until I have £500! Every little helps so start with a modest amount then increase it when you can.

    Sarah
  • [Deleted User]
    [Deleted User] Posts: 0 Newbie
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    Yes, in 5 months we already accrued £500 interest on 1.84% the interest in the first 2 years is a lot, the quicker you overpay the better. We already knocked a year off our 12 year mortgage by overpaying.
  • julicorn
    julicorn Posts: 2,281 Forumite
    First Anniversary Name Dropper Photogenic First Post
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    We started asap. This is also not our forever home, but we're treating the overpayments effectively as a way to have a larger down payment for the next home we buy.
    Original mortgage: December 2017, £203,495
    MFW start: April 2018, £201,800
    Mortgage neutral: September 2022, mortgage redeemed: December 2022
    New house, new mortgage: December 2022, £276,007
    Current balance: £217,800 minus £8,300 overpayment savings pot
  • monz
    monz Posts: 4,129 Forumite
    First Anniversary First Post Debt-free and Proud! Stoptober Survivor
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    I just got my mortgage through and even with renovations (much needed!) I am going to be making small overpayments. If you go on Martin page about over payments £10 a month can be £800 saved in interest! So logical :) xx
    Debt (1/9/14) £6,702.11 Debt free (30/11/2016) mortgage port- £70,077.82 and mortgage £126,517.39 o/s currently
    Debt - £17,190.83 (29/7/22) now (19/8/22) £16,688.80
  • Urbanshyne
    Urbanshyne Posts: 105 Forumite
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    Hi Kenzie,

    If you're not happy with your kitchen - get a new kitchen! Overpaying can wait for a little while, surely?

    Good luck with your MFW journey.
    Neither a borrower or lender be; for loan oft loses both itself and friend.
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