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  • FIRST POST
    • JillyC8
    • By JillyC8 13th Jan 19, 2:48 PM
    • 95Posts
    • 21Thanks
    JillyC8
    Mortgage Overpayments - How Small or Large?
    • #1
    • 13th Jan 19, 2:48 PM
    Mortgage Overpayments - How Small or Large? 13th Jan 19 at 2:48 PM
    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
Page 1
    • Rach273
    • By Rach273 13th Jan 19, 3:04 PM
    • 30 Posts
    • 11 Thanks
    Rach273
    • #2
    • 13th Jan 19, 3:04 PM
    • #2
    • 13th Jan 19, 3:04 PM
    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.
    March 2019 Mortgage: £128,600 September 2017 Mortgage: £135,000

    Savings targets; House/DIY fund £808.17/£1,500, Car fund £204.19/£5,000, Rainy day savings £1,658.70/£6,000.

    Debt repaid; £2,175/£8,800 (all 0%)
    • Trina90
    • By Trina90 13th Jan 19, 3:31 PM
    • 190 Posts
    • 217 Thanks
    Trina90
    • #3
    • 13th Jan 19, 3:31 PM
    • #3
    • 13th Jan 19, 3:31 PM
    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.
    Mortgage started 2015: £150,000
    2016: £130,000
    2017: £116,000
    2018: £105,000
    • skippie
    • By skippie 13th Jan 19, 4:58 PM
    • 69 Posts
    • 59 Thanks
    skippie
    • #4
    • 13th Jan 19, 4:58 PM
    • #4
    • 13th Jan 19, 4:58 PM
    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.
    MFW #144 £0/£5000 2019
    • Happier Me
    • By Happier Me 13th Jan 19, 5:33 PM
    • 490 Posts
    • 1,098 Thanks
    Happier Me
    • #5
    • 13th Jan 19, 5:33 PM
    • #5
    • 13th Jan 19, 5:33 PM
    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
    • By Tartan Mum 13th Jan 19, 7:16 PM
    • 134 Posts
    • 695 Thanks
    Tartan Mum
    • #6
    • 13th Jan 19, 7:16 PM
    • #6
    • 13th Jan 19, 7:16 PM
    Iíve wondered this too. Iím 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 itís just too tempting
    #68 MFW 2019 challenge
    £1047.19/£2400
    • berries
    • By berries 13th Jan 19, 7:53 PM
    • 78 Posts
    • 153 Thanks
    berries
    • #7
    • 13th Jan 19, 7:53 PM
    • #7
    • 13th Jan 19, 7:53 PM
    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
    • By A Frayed Knot 13th Jan 19, 8:18 PM
    • 2,709 Posts
    • 11,998 Thanks
    A Frayed Knot
    • #8
    • 13th Jan 19, 8:18 PM
    • #8
    • 13th Jan 19, 8:18 PM
    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;

    Every £1 o/paid, is a £1 you will never pay interest on again


    Worked a treat for me
    Always have 00.00 at the end of your mortgage and one day it will all be 0's
    Mortgage Free 21.12.18
    Just 11 Years 3 months early
    MFMarch 30 Re/M Oct 23 Target -Dec 19
    O/P's 2014/£4000, 2015/£6294.69, 2016/£3186.80, 2017 £4068.97

    • JillyC8
    • By JillyC8 13th Jan 19, 8:36 PM
    • 95 Posts
    • 21 Thanks
    JillyC8
    • #9
    • 13th Jan 19, 8:36 PM
    • #9
    • 13th Jan 19, 8:36 PM
    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
    • By kev2009 13th Jan 19, 9:50 PM
    • 355 Posts
    • 508 Thanks
    kev2009
    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
    • By JillyC8 13th Jan 19, 10:05 PM
    • 95 Posts
    • 21 Thanks
    JillyC8
    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.
    • JillyC8
    • By JillyC8 13th Jan 19, 10:07 PM
    • 95 Posts
    • 21 Thanks
    JillyC8
    sorry, error in my post above, my emergency fund is currently at £2000 which is only the equivalent of around 2 month's cover should anything go wrong. I hope to build it up to around £3500 then start paying more off the mortgage.
    • Tartan Mum
    • By Tartan Mum 13th Jan 19, 10:20 PM
    • 134 Posts
    • 695 Thanks
    Tartan Mum
    I’m going to try and make a relatively small payment tonight just to see what happens. Wish me luck
    #68 MFW 2019 challenge
    £1047.19/£2400
    • JillyC8
    • By JillyC8 13th Jan 19, 10:22 PM
    • 95 Posts
    • 21 Thanks
    JillyC8
    Good luck! ��
    • kev2009
    • By kev2009 14th Jan 19, 6:19 PM
    • 355 Posts
    • 508 Thanks
    kev2009
    I think the general opinion seems to be to have a minimum of 6 months to 1 year of emergency money, i guess more than anything to give you some breathing space if the worst happens, you don't need to panic straight away.

    Yes, its possible mortgage terms are different, perhaps they have altered them based on when you took your mortgage or perhaps it varies on the length of your term.

    When i paid my first over payment, i could either reduce the term or reduce the monthly payment. As mentioned, i close the monthly payment so that i have the term on my side come re-fixing in another 2 years time then I will switch to reducing the term as i'm hoping to pay a reasonable amount of each of the 5 years which should then leave me in a good position that i wont worry as much abut the internet rate going up but will just have to wait and see, planning is all well and good but any number of things could go wrong...

    Kev
    • JillyC8
    • By JillyC8 14th Jan 19, 6:53 PM
    • 95 Posts
    • 21 Thanks
    JillyC8
    It would take me a long time to save up 6 months emergency money ... probably around two years ...

    Re overpaying, my bank is sending me separate letters confirming each time I overpay so looks like I'll need to call them up and ask them to stop ... what a waste of paper.
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