Mortgage overpayments

[Mallowmarshmallow]

Hello all

I have a ponderance:

Very generically, without knowing the rates and suchlike, would it likely be cheaper to have a fixed rate mortgage at £1000 per month or to fix at £500 pm and overpay by £500....?

Many thanks in advance for any insight anyone is able to share.....!

It would be exactly the same, surely?? So long as you reduced the term with your overpayments.

I have always fixed lower as you never know what can happen in 5 years time and then just overpay it every year by the allowed 10%

Hopefully one day I will be in a position to overpay as it was always my intention to try and get it down quicker, but life happened lol.

When i come to remortgage in 18 months or so (future thinking) I was considering reducing the term, but read somewhere, think it was on money saving expert, that paying over a shorter term and overpaying work exactly the same. But what i liked about overpaying is that it's flexible. If you fix yourself in, you have to pay that amount no matter what happens, but if you overpay there is flexibility there if you need it.

So personally when the time comes, and hopefully I will be able to, I will opt to overpay than fix a higher amount. Just to give me that safety net

I echo stanski. That's what l am currently doing

The interest rate should be identical on either mortgage (assuming that the total size of the mortgage and all other details are the same) so the two options will cost you the same. I would ALWAYS opt for the longest possible mortgage term to minimise the required monthly payment and then overpay to get it paid off quicker. We bought our first house in December last year and took out a 35 year mortgage (fixed for 5 years). The aim is to pay it off in 20 years. So far, we've made enough overpayments to reduce the term by 16 months. However, we also hope to have children in the near future and really value the flexibility of being able to drop our monthly payments to the minimum amount if required. Going for a 35 year term also means that we could afford to live on a single salary if required (such as for one of us to be a SAHP), which we couldn't do if we'd opted for a 25 year term. The only time where I would consider shortening the term would be when the mortgage gets low enough that we may be able to overpay more than the 10% overpayment allowed (but that's a looooooooooong way off for us!!).