Alliance & Leicester Mortgage Owners - Overpay now.

simonkirkland · 4 January 2006 at 2:22PM

Hi all,

For anyone that has an Alliance and leicester Mortgage and have some spare funds. This month is the only time you can pay some off your mortgage without incurring a fee. You can pay off anything from £500- 10% of your outstanding balance as long as you do so by the end of January.

You might think - Why would I want to do this?

Here's why:

Pay £600 extra off a year (equiv to £50 a month) on a £125k, 25yr mortgage at 4.24% (It may be more!)

and you will save £10,000 and knock off 2.9 years off your repayment term!!!

Or better still pay off £2000 (£166/month extra) and save £25,500 and 7.5 yrs

For me I'm fortunate enough to be able to pay £2500 (and hopefully most years!) this means I'll save £30,000 and have paid off my mortage 8.7yrs earlier so I'll own my house outright when I'm 40! better than 50!

To overpay with A+L call: 0870 901 1001 (or try 0113 2541566 - from saynoto0870.com)

For number crunching visit: http://www.channel4.com/4money/mortgages/features/overpayment_calculator.html

Hope this helps someone.

Simon

stevenclarkuk · 4 January 2006 at 2:44PM

And if you like the sound of what simonkirkland is suggesting but don't have an Alliance and leicester Mortgage check with your own mortgage lender to see if they do the same..

I just checked with Abbey national and they stated that I can overpay up to 10% a year without incurring a charge also..

But remember, if you have any credit/store card debt with a higher rate of interest than your mortgage, it makes sense to put the money toward the credit/store card first, then concentrate on the mortgage!!

Steven

kinster_2 · 4 January 2006 at 4:50PM

the C4 Website Calculator isn't working correctly for me

payless · 4 January 2006 at 5:09PM

thats true, ( but you save £10K by knocking off 3 yrs, not both) although of course thats assuming

1. you have the spare funds

2. you have nothing better to do with it
( ie repaying debt that is charged at higher rate, or possibly earn more interest eslewhere )

also watch out went its applied - today or end of month, or end of year ( daily monthly or annually!) depends on lender, and some lenders have different rules on different products- hence I assume OP's comment of A&L in Jan , as thats what most of their recent products allow

simonkirkland · 4 January 2006 at 6:07PM

I agree with these comments. Only pay off your mortgage if you have 'spare cash'. In this I mean money after paying off worse debts and needed savings (you can of course borrow the money back again with some mortgages).

Hope this has reminded some people that this is the only time you can do this with A+L (recent mortgages). I think it's worthwhile. A mortgage is probably the biggest expense anyone ever has (apart from children

) and if you can get rid of it sooner, great...

I don't like the fact that my £140k home will cost me £220k if I make 'normal' payments!!!

57% more!!! Ouch...

Simon

kinster_2 · 4 January 2006 at 6:28PM

I got some spare cash, but the doing the calculations by paying £1000 doesn't seem to reduce my payments according to that site

simonkirkland · 5 January 2006 at 8:59AM

It doesn't reduce your payments that's not the intention of overpaying. It reduces the amount paid back assuming you continue to pay your normal monthly repayment and some extra (monthly extras in this case)

The important bit is the overall savings or term length reduction. There are other mortgage calculators out there that do similar things.. search google for '"mortgage calculator" overpayment' and see what comes up... here's a few:

http://www.mortgages-online.co.uk/calculator_overpay.html

http://www.bradford-bingley.co.uk/mortgages/calc/flexcalc.asp?linkfrom=yahoo

http://mortgages.charcolonline.co.uk/mortgages/calculator/flexcalculatortext.aspx

Simon

Alliance & Leicester Mortgage Owners - Overpay now.

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