I know there are a lot of financial whizzes on STW, I wonder if you could help me out - I've never had a mortgage in the UK but I *think* my assumptions are correct, but I'm willing to listen to any advice given.

Scenario: A friend is remortgaging soon as she is currently at the end of her current deal, and her rate has reverted to the lender's standard variable rate (something bad, about 5.9%) - because she has a relatively high LTV (about 85%) she is struggling to get a good deal, and is looking at about 3.8% APR fixed over the next two years. This is a standard repayment mortgage, interest and capital calculated daily.

My theory is that if she overpays this mortgage every month the effective APR can be brought much lower and in 2 years enable her to significantly reduce her LTV, and then jump on an even better deal.

I'm not sure how to calculate this effective rate - does anyone have a tool that could calculate this? Current figures are £122k outstanding over 22 years. 3.89% APR works out at roughly £689/month repayment. I would like to show workings for overpayments of say £200/month, £400/month and £600 /month.

(I know that there might be more effective ways of saving money but she wants to get rid of the mortgage as quickly as possible, which I can understand)

Cheers

Keith