Hi, here's the conundrum. I have an offset mortgage that comprises 40% Part Interest & 60% Part Capital. I am looking to reduce the overall term of the mortgage. I currently have 8 years to go with a rate of 3.75%. My lender (as is common) tells me that I have to clear the 40% interest BEFORE I start reducing the Capital section. I am fortunately in the position to have the funds available to match the whole mortgage amount and am currently overpaying my mortgage with a significant amount. Due to the way the offset is working I am getting a good return. QUESTION - should I clear the full amount of the interest only and concentrate on reducing the mortgage term or leave it as it is and just offset the whole amount as I am getting a good return and retain a lump sum for a future date? By quick finger calculus I would reduce the term by 16 months if I clear the interset only part. Thanks!!
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