Mortgage overpayment query

[lilcolibri]

Hi,

I'm a FTB and can't seem to find an answer to this:

If I take a mortgage out over 25 years, but can overpay it consistently, do I still have to pay back the full 25 years worth of interest?

Thank you.

No, the interest gets recalculated on the new balance every month, so as you pay it off faster you pay interest on a smaller balance.

Before we paid ours off completely DH always sent in an extra couple of hundred a month. We saved huge amounts on interest.

No because you reduce the interest overall. There are likely to be restrictions on how much you can overpay by without incurring a penalty of some sort. A common one is that you can overpay by up to 10% in a year.

No, it re-calculates after each payment. You can usually only over pay a certain percentage per year. Ours is no more than 10%.

Thanks so much, I knew about the penalties but didn't know if the overall interest stayed the same.

thanks again

No because you'll be paying it off early.
I overpay £250 per month and from time to time chuck a few thousand in the account. The interest rates have been lacking so it seemed better use of spare cash than a savings account.
I've paid off half the mortgage now and I've only had the property 7 years.

No, you can definitely make big savings by overpaying. We put a little extra each month, plus a lump sum when we can. I love this calculator which tells you how much you're saving. It makes it so satisfying...

www.moneysavingexpert.com/mortgages/mortgage-overpayment-calculator

Make sure your provider uses your overpayments to keep your monthly payments the same but reduce your term.

You can pay off your mortgage years earlier and save thousands in interest.

Was just about to link the MSE calculator.

Put your details into it with a monthly overpayment, and it'll show you how much you can save

(do check that there isn't a penalty for overlaying)

If you have excel try downloading the template from Microsoft

Loan Calculator with extra payments to see how much your term will reduce and the difference in interest