I recently had a large lump sum available to pay off a chunk of my home mortgage with B of S (1% tracker). I possibly could of done something more productive with this money but with my history of poor investments and low tolerance for risk I thought this was a sensible option.
The default with B of S is to keep the term the same but reduce the monthly repayments. After a recent post by Brendan Burgess I can now see the logic in retaining the original term and overpaying.
I am now able to overpay my B of S mortgage by approximately €1000 per month.
B of S have told me that if you overpay by more than €1000 per month this will reduce the term. However if you overpay by less than €1000 per month their policy is that this will not reduce the term only the capital.
Can someone explain exactly what they mean, how this would affect the monthly payments and if there is any advantage in overpaying by more than 1000 Euro/month. Thanks
The default with B of S is to keep the term the same but reduce the monthly repayments. After a recent post by Brendan Burgess I can now see the logic in retaining the original term and overpaying.
I am now able to overpay my B of S mortgage by approximately €1000 per month.
B of S have told me that if you overpay by more than €1000 per month this will reduce the term. However if you overpay by less than €1000 per month their policy is that this will not reduce the term only the capital.
Can someone explain exactly what they mean, how this would affect the monthly payments and if there is any advantage in overpaying by more than 1000 Euro/month. Thanks
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