How to calculate effectiveness of over paying my mortgage !

feisty1

rover 25 what is it yr actually trying to calculate?

CocoLoco_3

Reds-on-Sea wrote: »

e.g. First scenario:
£100k mortgage, repayment mortgage on £50k of this:
- pretty straightforward, repayments stay the same each month, but as you're repaying a bit of your capital each month, the amount you're paying interest on gradually gets less and less, therefore your £50k of debt will reduce exponentially.
£100k mortgage, interest only mortgage on £50k of this:
- repayments also stay the same (though will be less than the repayment part of your mortgage) you never pay back any capital, so you'll always be paying interest on £50k, even on the last month of your mortgage when you will still be left with £50k of debt.

In this instance, it will be more beneficial to you to overpay on your interest only mortgage as it will result in your having less actual debt (to pay interest on)

Thanks for your help Reds. It is the first scenario - two mortgages taken out at the same time with the same lender for the same property - I left the house I used to share with my ex-partner and didn't know how it would work out living by myself ( which is why I didn't leave him sooner! ) and didn't want to commit to a big repayment only to find I wouldn't be able to stick to it, so tried to reduce my expenditure by going partly interest only. ( as a temporary measure )
If i were to keep the 2 mortgages in this form, I suppose it would give me the flexibility of being able to pay the equivalent amount of a normal repayment, whilst being able to not-overpay if and when I had to.

rover25

feisty 1, how much will be left owing on my 165,000 mortgage if I overpay by £1000 per month for the next 3 years. (based on 5% rate) My repayment per month is £851.61, the £1000 would be overpayment so total of £1851.61
I probably didn't word it very well.

rover25

found a site http://www.thismuchiknow.co.uk/postfiles/MortgageOverpayments.xls
it will tell you how much you after x amount of years.

feisty1

165k over 33yrs overpay 1k per month from yr1-3

Total Saving on interest £113,282
Loan paid off in 21 years and 1 months

[EMAIL="165k@5%"]165k@5%[/EMAIL] over 33yrs would be £341894.36 (this is capital & interest)

Reds-on-Sea

rover25 wrote: »

Its a repayment mortgage Should have guessed it wouldn't be that simple. Anyone have idea how much would be owed on 165000 mortgage if pay off 1000 per month extra on top on owed eg £850 per month for 3 yrs taking an average of 5% interest rate

2nd question is is the 9.3 yrs right that that site worked out for me?
Thanks

after 3 years of overpaying £1000pm, your balance will be £119,878.99
:j

TeresaO

I got a bit confused on this thread, as to who was doing what. But, you have to be aware that if you are only allowed to pay off 10% per year that in year 2 you'll be allowed to pay less...does that make sense? i.e. it'll take longer than the calculated because you are paying less....

T

Reds-on-Sea

I'm allowed to overpay as much as I want on my mortgage, but yes, if you start with £100k you can overpay 10% = £10k.
then in year 2, balance = £90k, so 10% = £9k etc etc...

RoxieW

look on the MFW thread - there are lots of calculators on there.

rover25

Must say a big thank you to reds on sea. Thanks for working out the balance. I appreciate it!:beer: