When you overpay it comes directly off the principle.
Say you have 100k balance remaining in January, and are on 4% interest rate.
You would be paying slightly less than 4k in interest that year.
If you made an overpayment of 10k in January, your balance would be 90k
And you would be paying slightly less than 3.6k in interest that year.
(Plus every subsequent year, the balance would be lower relative to where it would have been had you not overpaid, so in every subsequent year the interest will also be lower than had you not made an overpayment).
What is the difference in over-paying during variable term for these same aspects?
Over-paying during variable term has the exact same effect, you just aren't subject to any rules about how much you can overpay, and there are no break fees.