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I'm trying to work out the optimum time to make a one-off mortgage overpayment. I want to do it without a monthly reduction - so a term reduction only - which carries a per payment fee of £30.
Lets use £1000 as an example on my rate of 2.84%. Roughly speaking, it attracts £28.40 interest per annum. So paying it off early in the year would seem the cheapest option, to avoid paying the the £28.40 interest on top of the fee.
BUT - what if I was expecting more money available during the year of an unknown amount and unknown time, how do I work out the optimum amount/time to pay to reduce overall costs if I wanted to make a single payment of £30 for the admin fee.
It's given me a headache - any boffins able to help with an equation?
Ask your mortgage company, mine were very helpful when I did something similar a few years ago
If they calculate it immediately, pay it immediately.
Regarding the "other money" later in the year "sometime" pay that as soon as you get it separately.
Most banks only charge if you're paying more than 20% of the outstanding balance.