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Mortgage Overpayment

(4 Posts)
Starmummy Fri 03-Jul-09 11:42:26

We have an offset mortgage. Would you overpay the interest portion or the capital portion. I think capitail as there is less to pay interest on but DH disagrees. Any ideas?

Tambajam Fri 03-Jul-09 11:43:56

Capital portion. Then when interest rates do rise again you have less interest to pay and you can keep down your monthly payments - surely!

Hassled Fri 03-Jul-09 11:45:17

I second capital. Makes far more sense long term.

DaisymooSteiner Fri 03-Jul-09 11:45:29

If it's an offset mortgage then surely any money you have in your account is just used to reduce the amount of interest you accrue on your mortgage, so no need to actually overpay and you can keep your money accessible?

I haven't got an offset mortgage though, so perhaps I've misunderstood how they work.

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