Ovepaying Mortgage

[Pinchy]

Hi,

Just looking for some peoples ideas regarding the following:

I have a reasonably small mortgage and I have been able to pay a little extra each month (about 20% extra on what is due) and I am wondering what happens to that extra money, ie does it reduce the term of the mortgage or does it come off the capital etc? Or could I skip a payment if it is seen as a pre payment?

The bank were, alarmingly unable to answer my question!

Any feedback much appreciated.
Thanks

 

[Brendan Burgess]

It comes off the capital.

You will be charged less interest.

So if you continue paying at this higher level, your mortgage will be repaid earlier than planned.

Brendan

 

[PaddyW]

Pinchy, did you not specify when you started the overpayments, that it should come off the capital rather than the interest?