Your browser isn't supported
It looks like you're using an old web browser. To get the most out of the site and to ensure guides display correctly, we suggest upgrading your browser now. Download the latest:

Welcome to the MSE Forums

We're home to a fantastic community of MoneySavers but anyone can post. Please exercise caution & report spam, illegal, offensive or libellous posts/messages: click "report" or email forumteam@.

Search
  • FIRST POST
    • Mabainal
    • By Mabainal 15th Jun 17, 10:25 PM
    • 3Posts
    • 0Thanks
    Mabainal
    Mortgage free in 3(ish) years.
    • #1
    • 15th Jun 17, 10:25 PM
    Mortgage free in 3(ish) years. 15th Jun 17 at 10:25 PM
    Hi, got a question around part interest only part capital and interest mortgage (£50k +£10k@ 2.5%) that i want to start overpaying with money i was paying to a further advance but have paid this off with endowments earmarked for interest only part as this was 3.75% with nationwide. I have half share in a rental worth approx 40k (approx 200/month rent,) so this could cover most if sold if required but want to use rent to overpay with as well. Question is would i be better off paying off the interest only part first on the cap and interest part or would it make no difference other than to reduce my exposure to the risk of now having no endowments to I/O part. Mortgage is due paid off 2034 but i want it gone, certainly I/O part by August 2020 using o/p, rent and employee share scheme.
Page 1
    • Mabainal
    • By Mabainal 18th Jun 17, 1:07 PM
    • 3 Posts
    • 0 Thanks
    Mabainal
    • #2
    • 18th Jun 17, 1:07 PM
    • #2
    • 18th Jun 17, 1:07 PM
    Bump, do no one have any idea what is best in this situation?
    • LadyGnome
    • By LadyGnome 18th Jun 17, 2:12 PM
    • 420 Posts
    • 1,550 Thanks
    LadyGnome
    • #3
    • 18th Jun 17, 2:12 PM
    • #3
    • 18th Jun 17, 2:12 PM
    I think you need calculate the options and see which works out best.
    So how much is IO and at what rate?
    How much is capital and at what rate?
    Mortgage
    Start Nov 2012 £310,000
    June 2017 £248,590.81 Reduction £61,409.19
    MFW 2017 #42 £2386.30/£3100
    End Oct Sept 2034 but I have a cunning plan...
    • Mabainal
    • By Mabainal 18th Jun 17, 7:30 PM
    • 3 Posts
    • 0 Thanks
    Mabainal
    • #4
    • 18th Jun 17, 7:30 PM
    • #4
    • 18th Jun 17, 7:30 PM
    50k Interest only 2.5%
    10k cap repayment 2.5%

    Due July 2034
    • LadyGnome
    • By LadyGnome 19th Jun 17, 1:12 PM
    • 420 Posts
    • 1,550 Thanks
    LadyGnome
    • #5
    • 19th Jun 17, 1:12 PM
    • #5
    • 19th Jun 17, 1:12 PM
    I think it makes more sense to focus your OP on the IO part of the mortgage as the repayment mortgage is so small and will be reducing anyway.
    You have the potential to create a bit of a snowball effect with the IO as every capital repayment should reduce the interest. So if you don't reduce your payment when the interest drops then you get an extra capital repayment each month.
    Mortgage
    Start Nov 2012 £310,000
    June 2017 £248,590.81 Reduction £61,409.19
    MFW 2017 #42 £2386.30/£3100
    End Oct Sept 2034 but I have a cunning plan...
Welcome to our new Forum!

Our aim is to save you money quickly and easily. We hope you like it!

Forum Team Contact us

Live Stats

4,054Posts Today

9,663Users online

Martin's Twitter