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chrisbmx116-
Trying to put something together to explain this to mrs_com. SHe gets it and trusts me, I would just like to be able to explain it better. Attached is massively oversimplified and the numbers themselves aren't important, more the direction of value change and the difference in over-paying and just paying the set amounts.
Plus, overpayments mean you can take payment breaks should anything go temporarily tits up in a big way.
stevo_com
Re: overpaying. I am planning to do this as much as I am able over the new 5 yr fix. The way I see it is that I am increasing my equity in the place so that when it comes to renew or sell, my LTV will be more improved than just paying the mortgage itself. Also (and someone might be able to correct me here if I have misunderstood), as you are making the overpayments, you are reducing the loan amount more quickly than the standard payments, so the amount charged in interest each month reduces, meaning that you regular payments start to pay off an increasing amount of the loan also, effectively themselves becoming overpayments. Hence the exponential-ish nature of those overpayment calculators.