Overpayment calculator - here

Calfuray

Draved wrote: »

That's what it looks like when I calculate £3 by the amount of months on the term left. They would have to take it off the capital owed though as they can't predict future interest rates surely?

I'm on hold on the phone now.

Yeah, 1200/3 = 400 months left to pay, if that's about right?

And no, they can't predict the future interest rates, but all they have done is reduce it based on the number of months left, which will remain the same unless you change it

Draved

Yeah, just had that confirmed. All over payments come off the loan amount not the interest so in the grand scheme of things I've done what I've wanted by reducing the overall capital owed. We currently pay £795pm and if we paid £1000pm then the 31 years left becomes 20 years left. If I continue to overpay as I'm doing it will eventually lead to a shorter term.

Thanks for your help.

dawyldthing

I've just rung them again to ask for the term to be lowered. Apparently there is a backlog, but keep pushing and they should be able to sort it as then you can pay whatever you want as long as they agree (including overpayments i've already knocked off 2 years and only had it last april) so it is well worth doing if you can and will stop the 3% charges if you over pay more than your 10% yearly allowance.

Draved wrote: »

I started overpaying my mortgage 12 months ago (£100pm). I set up and transfer it manually every month.
I called the Halifax last month just to check how it all works out and they readjusted my monthly payments by £3pm !!!:o

I'm still not entirely sure how it all works so any advice would be appreciated.

I am still overpaying by £100pm but I suppose what I've actually done is begun overpaying £97pm?

Paying an extra £100pm shaves 10 years (ish) off my £170k mortgage. Should I just keep overpaying and not asking the Halifax to recalculate?

Will my term reduce on its own or do I need to get them to reduce the term and increase my mortgage payments?

Being on the Halifax SVR of 3.99% does anyone know when interest is calculated in case I want to pay a lump sum and when the best time is to do it?

clearmydebt13

Hi all, can someone please help me. I'm dreadful with money and have a huge problem. I have an interest only mortgage of £201,000 with 18 years left. My interest is tracking the base rate at the moment. Question: If I make an overpayment of £900 each month on top of my interest payment of £536, how do I calculate the interest that will go down? Also, I've calculated that I need to overpay £900 to make sure I don't have a big repayment at the end of the term. Is this correct?
I really appreciate the help.

brizzledfw

Hi CMD

Am a bit confused re your point re a large overpayment at the end? Surely you will have the full amount you originally borrowed to pay at the end as you are in an interest only mortgage?

Paying off interest earlier presumably brings that date forward ( although am not sure on last point).

Katzen

clearmydebt13 wrote: »

Hi all, can someone please help me. I'm dreadful with money and have a huge problem. I have an interest only mortgage of £201,000 with 18 years left. My interest is tracking the base rate at the moment. Question: If I make an overpayment of £900 each month on top of my interest payment of £536, how do I calculate the interest that will go down? Also, I've calculated that I need to overpay £900 to make sure I don't have a big repayment at the end of the term. Is this correct?
I really appreciate the help.

Try the overpayment calculator on the main website (roll your mouse over the mortgages tab at the very top of the page then click on overpayment calculator). Just put the numbers you've written down here in the boxes there and 'hey presto'. It's dead simple. That will then produce a list of how much you will owe at the end of every year. In an interest only mortgage that number won't change, unless you overpay as you are suggesting.

If you pay an extra £900 per month that will come off the capital owed so you will owe less by the end of the term. It will also bring down the interest owed each month too but I can't tell you by how much off the top of my head. My advice would be, if you can afford £1436 per month you just set up that direct debit and keep paying it until it's gone. As the interest goes down, the amount you are paying off the capital will go up, you don't really need to worry about exactly how much I don't think.

Katzen

clearmydebt13 wrote: »

Hi all, can someone please help me. I'm dreadful with money and have a huge problem. I have an interest only mortgage of £201,000 with 18 years left. My interest is tracking the base rate at the moment. Question: If I make an overpayment of £900 each month on top of my interest payment of £536, how do I calculate the interest that will go down? Also, I've calculated that I need to overpay £900 to make sure I don't have a big repayment at the end of the term. Is this correct?
I really appreciate the help.

Just done the overpayment calculator for you and it says (assuming rates don't change) that a £900pcm overpayment would actually clear your mortgage in just less than 15 years. Overpayment of £700 would get it cleared in just less than 18 years.
Hope that helps

serry

I think that the mortgage is better than money being saved in an offset.

murphy306

I read somewhere that if you take the capital and divide it by the months left you will reach your payment that you will need to clear the mortgage. Is that right? Interest only that applied to but does not seem right?

shop-to-drop

murphy306 wrote: »

I read somewhere that if you take the capital and divide it by the months left you will reach your payment that you will need to clear the mortgage. Is that right? Interest only that applied to but does not seem right?

That should work as an overpayment. You would still need to pay your regular interest payment on top.