Paying off mortgage early

alice's_mum

Have been reading these pages for a few months and have picked up loads of tips. But this is the first time I've ever written so be nice PLEASE.

We currently have a mortgage of 80839.90 with A&L which we took out in Oct 03 this is on a fixed rate of 4.89% this is fixed until October 09. Have been looking at the amorisation exel thing but coz our mortgage is half and half, we did have complete endowment, but have now 33k on interest only and the rest on repayment. I couldn't work out how to get the xl thing work this out, can any one help?. We'd like to pay off the mortgage earlier if poss, bearing in mind that the endowments we still have mature in 2013 28K+ this one has worked well and the other is for 5K in 2015 (i think), so once they mature we'd clear them off the mortgage. currently pay £424.50 pcm.
Thanks.

Gingham_Ribbon

Welcome aboard, Alice's mum! :hello: I'm sure you'll get lots of help on here shortly.

Thefunkygibbons

What rules apply if you swithed the whole thing to repayment rather than interest only as that would help in getting it all paid off sooner?

lisyloo

We'd like to pay off the mortgage earlier if poss

You might find that there are penalties if you make "overpayments".
Therefore 2 options spring to mind.
You could put £3K each per year into a cash ISA, so that cover up to £500 per month.
I have mine with Halifax at 5% so you won't lose out this way (as it pays slightly more than your mortgage rate).
There are higher rate ISAs around but beware of temporary bonuses.

Alternatively as the last poster said you can switch more of the mortgage to repayment.

Personally I'd probably do the former because it gives you flexibility i.e. you can take the money out of the ISAs in an emergency.
If you switch the mortgage then you MUST keep up the payments.

tyllwyd

One thing that I noticed was your endowment for 5K which has still got nine years to run. I'm quite negative about endowments because we got stuck with a totally rubbish one, and we got rid of it which was the best thing we ever did! But 5K seems quite a small sum - have you double checked that it is giving you good value, and what the effect would be if you cashed it in now and put the money (plus your monthly payments) straight back into the mortgage?

alice's_mum

HI thanks for the replies, we hadn't thought of changing to repayment only, mainly due to the impact we think it would have on the monthly payments. We can only pay in extra money in January of each year, but then we can pay in 10% of the mortgage total so about 8k a year, we have started putting money into a high interest account so that we can pay off a lump sum in January. Will look into the situation with the little endowment, as that was something we hadn't thought about. The big endowment is still on track to make it's promised figure as it's been going since the mid 80's and made a packet in the first few years.

Thanks for all your replies they've given us more ideas to think about. I love this site.