Mortgage overpayment question - bit dull

[thekingfisher]

Hi we have a mortgage with Barclays - if has it been impossible to contact them at all in the last few weeks ( holding for literally hours!)
We have £98 k on repayment and £392k on interest only - both on same interest rate
We very fortunately have a lump sum to pay into the account of 40K (which we have a latitude to do within the rules )
However we are going in circles as to what is the best bit to allocate it too - my view is the repayment 'bit' but is that right and why ?
Can anyone advise?

Are both bits over the same term?

For me it would depend on what your repayment vehicle was for paying off the interest only part. That’s the part that’s costing you more in the long run so without knowing any more I’d pay the 40k off that part.

they are over the same term.

We are relying on bonus's to pay off the majority over the duration of the loan

Dont shoot me but it's a second home - so we would remortgage once the fixed term finished in 5 years if we are not able to pay off in that period

Do they both have the same terms and conditions for early repayment charges if you’re still within product?

Yes - they form the same part and part mortgage 5 years fixed (technically then cvariable for a further 11 years)

Check your terms as our Barclays mortgage only allows overpayment of 10% of each mortgage year.

If rates are the same on both I'd be more inclined to pay off against the interest only as the repayment is already paying down and increasing the equity (if that makes sense).

Jammy moo

I agree pay off the interest only part as you are already paying down the repayment part. Most allow 10% repayment. It maybe that you have to repay 10% of the interest only ie. £39,200. The remaining £800 in the repayment .

Thanks both that's really helpful and makes sense

You should first check your overpayment allowance for both parts & pay into both without attracting penalties. Then hold the rest of your amount until your next 'year' or new allowance would begin & then put in more. No point paying penalties for putting money into your own mortgage.

Thanks - we can put in 10% per annum which we have now done this morning and now have the date for the next window too - so thanks for that.

You will have a big smile when you get your next statement