Mortgage overpayment

[EnidClowes]

We are finally in a position where we are able to start working on overpayments to our mortgage.
I just checked our account and it gives us a few options. I can't work out which it better in the long run
In a few years we are hoping to find some money (remortgage?) to build a loft conversion (I'm also hoping to renovate kitchen and add a side return etc but I think that'll be a lot further off!)
I know I'll probably have to see a financial advisor really but can anyone explain what the benefits of these options are if I want to possibly remortgage in a couple of years. Is it worth overpaying?

1.Pay off mortgage earlier by reducing my mortgage term

1. Reduce my future monthly payments

1. Keep my existing payment and term as is (at the next natural payment change ie interest rate change, my payment will be automatically recalculated)

If you over pay can you get the money back? How are you planning to fund loft conversion?

We think (need to look into) remortgaging. Unlikely to be a for a few years though.

Well the quickest way to pay off your mortgage is reducing the term. Keep monthly payments the same.

If you have some spare cash now but think you might need some in a few years, you are a good candidate for an offset mortgage. This is where instead of earning interest on money in your current account, the balance is deducted from the mortgage owed when mortgage interest is calculated.

As in recent years typical returns on ISA investments have been greater than interest paid on a typical mortgage, you might be better off keeping to your normal repayments schedule and investing your spare cash in an ISA. These are easy to cash in should you need to finance the work on your house.

We do number one, reduce the term. Our mortgage is also with nationwide and we have an ‘overpayment reserve’ which totals the amount we have overpaid by over the years. We are able to borrow that back if we need to, I’d check if your mortgage is the same, it was very easy when we borrowed a few thousand back for a car.

@Giraffesarequitetall same for use too I don't think it's available on new mortgages with them anymore but ours is ancient we just use it like a savings account!

Yes ours is ancient too! Fell onto the standard variable rate when a deal finished in 2009 I think then everything crashed so it works brilliantly and we stayed on it! They soon took that rate away for new customers though!

Thank you, we've gone with reducing the length of mortgage. It was quite a revelation seeing how much we can knock off the cost of it.

Thank you all, much appreciated

Aaaand we've started off with a small £130 extra a month (we still have a tight budget) but I'm hoping that we can whack an extra bit in there from time to time. 2018, year of being an actual grown up (or at least taking baby steps towards becoming one!)