Mortgage Overpayments - How Small or Large?

JillyC8 · 13 January 2019 at 3:48PM

Hi,

After reading the posts on here I've begun making small overpayments on my mortgage when I can, but wondered,what are the smallest payments people on here make at any one time? Do you put money into a savings account and let it build up to a sizeable sum first, or do you pay small sums directly off the mortgage?

Jx

Rach273 · 13 January 2019 at 4:04PM

I've paid off a penny before now, just to keep in the habit of overpaying. My overpayments are very small compared to some on here anyway, and I worry if I put it into savings the temptation to spend it on other things than the mortgage will get to me.

Trina90 · 13 January 2019 at 4:31PM

We do both - overpay £50 every month, and then once a year we use whatever savings we've built up over a year and do a big lump sum. We are very disciplined so would never spend it elsewhere, unless we need to for home repairs that can't wait.

skippie · 13 January 2019 at 5:58PM

Overpay little and often generally anything from one off payments of £25 to a couple of grand.

Everyone's different so you should do what fits best within your financial circumstances.

Happier_Me · 13 January 2019 at 6:33PM

Our last mortgage payment was November time but for years we've overpaid monthly by fixing the mortgage payment at an affordable amount. As we've been able to afford more (pay rises, reductions in child care etc) we've simply increased the monthly amount. We did have an offset mortgage which was great for flexibility.

Tartan_Mum · 13 January 2019 at 8:16PM

I’ve wondered this too. I’m with S@ntander and think they used to mandate minimum payments of £500. However I recently saw some small print that suggested there was no minimum which could be useful because although I think saving it up makes sense, sometimes it’s just too tempting

berries · 13 January 2019 at 8:53PM

I've been wondering the same too. Can't do large amounts as I've got a cc that needs paying off . I've got a 10 year fixed rate . Will now look into overpayment even ifs it's a tenner better than nothing!

A_Frayed_Knot · 13 January 2019 at 9:18PM

Doesn't matter how little or large o/p's made, it all adds up.

I rounded down my mortgage every day/2nd day (had a sub account as well), and the thought that kept me going was;
[FONT=&quot]
[/FONT][FONT=&quot]Every £1 o/paid, is a £1 you will never pay interest on again [/FONT]

Worked a treat for me

JillyC8 · 13 January 2019 at 9:36PM

Tartan Mum: I'm with Santander. I rang to enquire and the lady I spoke to gave me a sort code and account number to make the payments to and didn't mention minimum amounts. I made an overpayment of £25 to start with and since then have rounded down my current account balance to '00' each day ... today i paid £3.80. It's quite addictive!

kev2009 · 13 January 2019 at 10:50PM

I'm with Santander on a 5 year fixed deal and any over payment I make must be min £500. I made my first over payment in Dec. As i have 2 more years on my 5 year fix. Due to potential interest rate rises, I've decided to overpay and lower my monthly payments at present, with a view to overpaying as much as i can afford to over the next 2 years. The max i can pay in any 1 year is 10% of outstanding balance. Then I currently plan to re-fix for another 5 years and then continue to pay off as much as i can afford each year, BUT this time, i'll reduce the term. My main reason for not reducing the term at present is if the interest rate does shoot up, at least I've got a longer term to pay it over meaning monthly payments hopefully wont increase too much. However, when I re-fix, i'm hopefully going to be able to overpay a reasonable over payment each year which whilst reducing the term will also mean i owe less so if interest rates do rise, it wont mean as big a increase.

Plus i also prefer to keep the money in my bank for a year and if all goes ok etc then overpay incase i suddenly need the money etc.

I have already built up a emergency fund but still a bit cautious hence i prefer to make a 1 off OP each year.

Kev

JillyC8 · 13 January 2019 at 11:05PM

Maybe different mortgage deals have different rules regarding overpayment? Mine is a 2 year fixed with Santander and they confirmed I could pay whatever I wanted as and when I wanted. The term will automatically reduce each time I pay the equivalent of a complete month's payment.
I'm planning to save £200 into my emergency fund each month (fund currently at £209) and £75 off the mortgage, then try to pay bits and pieces as and when I can. I'm looking forward to seeing the mortgage reduce more quickly.

Mortgage Overpayments - How Small or Large?

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