Whats the best way to make interim mortgage payment?

[Birroc]

I want to go into the bank and pay money off my mortgage outside of the monthly payment. I suppose I want to put the money against the capital. Will that mean that the number of years left on the mortgage is reduced or my monthly payment is reduced? Which is the best way to approach or ask for this?

 

[LDFerguson]

If you're comfortable making your current monthly repayments, the better way is to arrange for your ad-hoc payment to reduce the term of your mortgage and keep the repayments as they are. (The alternative is possible, i.e. you reduce your monthly repayments now but that leaves the term the same.)

Write a letter to your lender confirming that you want your ad-hoc repayment to be applied immediately off the capital and that you want to reduce your mortgage's term. Ask for confirmation in writing.

Liam D. Ferguson

 

[26cb]

Also check for any 'early redemption' conditions.....

 

[Deas]

Generally the bank will have staff specifically assigned to advising on such matters. I do this myself by over-paying monthly. This reduces the capital balance; however I agreed this and signed up to it in advance. When I enquired I was given a number of options re over-payments and lump-sums and what impact they would have on either the term of the loan or reduced payments (in terms of lump sum). Ring the mortgage department of your bank. Don't make a payment without agreement, as this will only come off the immediate interest and not the capital balance and will not have a long term reduction.