Overpayment calculator - here

Hi,

Thanks for sharing such a wonderful post.

fttair wrote: »

Doesn't take inflation into account.

What doesn't?

amanda40 wrote: »

I have just started on my MF Journey and was looking for a calculator that let me put in different figures every month - found this and its fab

http://www.thismuchiknow.co.uk/?p=42

I downloaded the workbook and have now saved it to my desktop to update as I go - Hope someone finds it helpful!

Thanks Amanda, this is the best mortgage calculator I've come across.

confused_kid wrote: »

Now, for the next say 3-4years is it better to make these one off payments every month (providing lender allows) or switch to repayments...I would expect to overpay approx £3k p/year for the next 4 years say, meaning a reduced capital from 142k to 130k.

Question is, will I have reduced it by 12k by moving to repayment? (Understand everything is just an opinion,and this is very crude, and doesn't take into account a whole host of factors - interest rates etc)

In terms of how much you'll reduce the mortgage balance by making these extra payments, it doesn't make any difference whether it's done as a switch to repayment or as overpayments. Both will have the same effect. Which method you choose really depends on your situation. If you aren't sure that you will definitely be able to make the extra payment each month, it is probably better to stick with making overpayments - but if you think you might be tempted to spend the money instead of overpaying each month, it might be better to switch to a repayment mortgage so that you are committed to paying the extra.

If you were overpaying/repaying by £3k a year for four years, you'd actually knock *more* than £12k off your mortgage balance, because every bit you pay is a bit you no longer have to pay interest on. So, for example, if you paid an extra £200 now, you wouldn't be paying interest on that £200 in future - so each month from now on, your interest payment would be a little bit less. If you keep your monthly payments the same, a little bit of each monthly payment is going towards paying down your mortgage balance, and each month there'd be a little bit less interest, and a little bit more paid off. It doesn't sound like much, but it does add up.

Mint1955 wrote: »

I have an 80000 Nationwide mortgage on interest only at 6.1 for the next 3 years. I can now afford to pay an extra 500 per month on top of the 413 I pay now. Should I reduce the payments or reduce the capital and what will the outcomes be please my head is splitting reading this thread and trying to work it out which is the bext way to go.

As your mortgage is on interest-only, you will never have it paid off.

Assuming no changes to interest rates etc, if you were to overpay by £500 each month, you would have the mortgage paid off in full in 10 years.

All overpayments reduce the capital. I think you mean to ask if you should reduce the monthly payments or the term - but in your case, with an interest-only mortgage, you don't have the same kind of "term" that you would on a repayment mortgage. By overpaying every month, you are essentially treating your mortgage as a repayment mortgage. If you can afford the extra £500/month, just pay it off the capital.

Put your numbers in at http://www.egg.com/visitor/0,2388,3_54988--View_1028,00.html to see the results of your overpayments.