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  • How does that work? If you extend the term but overpay isn’t it just the same as having a shorter term in the first place?

  • As I understand it an overpayment goes directly against capital, the expected payment is a mix of capital and interest, so overpaying is more efficient at paying down the capital balance than paying a higher expected repayment on a shorter term. Plus you can vary if you need to.

  • Cash is fungible, right? Any cash in excess of the monthly interest charge is going to reduce the outstanding principal balance £-for-£. It doesn't really matter whether you call it a scheduled payment or an overpayment.

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