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Do overpayments on a mortgage reduce interest immediately?

27.02.2019 23:13 #1
Registered User
Hi, just wondering what happens to an overpayment on a mortgage?

Say for example your mortgage is €200,000 and payments are €1000 a month and your statement tells you it's split 600 capital and 400 interest.

The next month your interest is based on €199,400. I think that's correct, although figures are simplified.

However if instead of €1000 you pay €1200, does this mean the next month your interest is based on €199,200 as the extra comes off the capital? So interest should be marginally smaller?
27.02.2019 23:16 #2
Registered User
47 hours response time
27.02.2019 23:40 #3
Registered User
Originally posted by vicwatson
47 hours response time

Just hope I'm not in the 21% who don't get a reply. Sure I'm not in a rush anyway :-D
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28.02.2019 10:55 #4
Verified representative
Originally posted by Wheety
Hi, just wondering what happens to an overpayment on a mortgage?

Say for example your mortgage is €200,000 and payments are €1000 a month and your statement tells you it's split 600 capital and 400 interest.

The next month your interest is based on €199,400. I think that's correct, although figures are simplified.

However if instead of €1000 you pay €1200, does this mean the next month your interest is based on €199,200 as the extra comes off the capital? So interest should be marginally smaller?


Good morning Wheety, thanks for getting in touch. Anything you overpay on a mortgage account with KBC will come directly off the capital balance of the mortgage. This in turn would reduce how much interest you pay on a monthly basis yes. Thanks, Katie
1 thank
28.02.2019 11:26 #5
Registered User
Thanks. I thought that might be the case, but I had read somewhere about some banks just leaving it sitting there and then it clears the mortgage when the balance meets the overpayment.
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