WILTDCIIS4 - toluna-6.562-date2012-05-14-time07-44-30-57913c57fd87
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arvann

arvann

3 months ago

When making overpayment on Mortgagues, is it better to reduce term or take off capital ? and why, please help

I think It would be better to reduce the term as intrest mounts up more over time, and I dont want to have a mortgague for ever, but then I may be missing something, and my financial adviser is expensive, and doesnt really care.
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Mollygirl

  3 months ago
If you take off of the capital, then you end up reducing the overall term as you eventually shorten it down. Paying off a little extra when you can will really add up, and if you can't afford it from time to time then you aren't catching yourself in a position that you won't be comfortable in. Good on you for being in the position to do something positive!
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Waksy091

  3 months ago
I would pay the extra but contact your bank to ask them for clarity.
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Nattii10

  3 months ago
I guess it depends if the mortgage is repayment only. Or whether part repayment part endowment etc. We paid some money off our mortgage after we came in to some money - we paid 10% off and payment went down, we then paid off a further 10% the following year and reduced the term by 4 and a half years - the amount we would have paid in payments over that time would have been over £31k - which was just over 3 times what we paid off! I would contact your mortgage provider and see what they can do for you!
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tjacko

  3 months ago
When you make an overpayment, you pay off the capital, which reduces the both the term of your mortgage and the interest you pay.
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arrietypod

  3 months ago
Just pay the extra in and see what happens .
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