Can overpaying on a fixed rate mortgage be the same as a repayment mortgage?

Posted on 28 January 2008

If I took out a interest only mortgage say of £142,000 over 22 years and was allowed to pay an extra 10% a year if I paid the extra each month as if it was a repayment mortgage and never missed a payment would the extra money come off as if were a repayment mortgage or would the bank work it out differently.

Ang

Hi Ang,

Yes it would work out exactly the same as if you had set it up as a repayment mortgage. Ask your mortgage broker to give you a KFI (quote) for the mortgage on interest only, and a quote for repayment, sot hat you know exactly how much to overpay.

Category: Interest only vs repayment

 

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