Overpayments

Ohhohoho

Hi can anyone explain to me how i work out the effect of overpayments i may make on my mortgage?

It has 24 years to go, and although i currently only pay £30 extra, i hope to increase this once my debts are gone. Are there any online calculators?

My mortgage is in two parts as we took on additional borrowing. The main one has a balance of £81874 at 5.49%

The second one has a balance of £25,000 at 5.09 and this is the one we currently overpay. Lets say in the next year we manage to overpay each month by £200, what would the effects be?

canny_yorkshireman_2

I assume that the mortgage is intrest only and if the mortgage is calcalated on a daily basis it would make sense to carry on making monthly overpayments if not and the intrest is calcalated annually then make the overpayments into a good rate savings account then make a lump sum payment at the end of the year at £200 per month then this would give a reduction of £2400 off the capital every year plus the intrest saved.One thing to note is check with your lender that overpayments do not incur any redemption penalties
hth

alanobrien

Ohhohoho wrote:

Hi can anyone explain to me how i work out the effect of overpayments i may make on my mortgage?

It has 24 years to go, and although i currently only pay £30 extra, i hope to increase this once my debts are gone. Are there any online calculators?

My mortgage is in two parts as we took on additional borrowing. The main one has a balance of £81874 at 5.49%

The second one has a balance of £25,000 at 5.09 and this is the one we currently overpay. Lets say in the next year we manage to overpay each month by £200, what would the effects be?

easy to see if you use the overpayments calculator(s) in the sticky above.

Here's one
http://new.egg.com/visitor/0,2388,3_54988--View_1028,00.html

Ohhohoho

Thanks Alan thats exactly what i was looking for! (whats the sticky above???)

Canny, no it is capital and interest, i think the interest is calculated daily - must check that! and it is a flexible mortgage so overpayments are allowed.

Joe_Bloggs

@Ohhohoho
The sticky in this case is jargon for a post topic that stays close to the top of the page. This often has vital information that is often repeated. This is less of a feature within the MSE forum as their are no questions that are considered stupid or dim witted. On many other forums it is considered wise to read the stickies before posting as someone will always say 'read the stickies !' in an abusive manner. This is never the case on this forum.
Kind regards
J_B.

Ohhohoho

Thank you!

I have to say this site has an amazing amount of info here, but i think its going to take some time to work out where everything is and how it all works!

Btw is there a quick way to pull up the threads that i am currently on? other than searching my name.

Merlin139

Go to User CP at top of page. Click and then when the page refreshes click on list Subscriptions. It will show all the threads that you have entered a post on.

tomstickland

I've recently made my own mortgage calculator spreadsheet that includes an overpayment calculator. It solves the basic compound interest formula and shows monthly cost, total paid back and the new term if you overpay.
I'll post it up tonight.
For example, with a 4.4% rate on £76K over 25 years the monthly cost is £420.
Overpaying by £300 per month will reduce the term to 11 years and save me £45,000. Something like that anyway.

Hawksmuir

Ohhohoho wrote:

Hi can anyone explain to me how i work out the effect of overpayments i may make on my mortgage?

It has 24 years to go, and although i currently only pay £30 extra, i hope to increase this once my debts are gone. Are there any online calculators?

My mortgage is in two parts as we took on additional borrowing. The main one has a balance of £81874 at 5.49%

The second one has a balance of £25,000 at 5.09 and this is the one we currently overpay. Lets say in the next year we manage to overpay each month by £200, what would the effects be?

Pay off the first part if possible, it has a greater outstanding amount and bigger interest rate.

Ohhohoho

Thanks Merlin.

That'll be good to see Tom.

And I know that is the logical thing to do Hawksmuir isn't it! I think when i set the overpayment i was thinking, get rid of the smallest one first, but not such a good idea!

DavidHM

On the basis that your other debts are probably at a higher rate of interest, pay them off first with the spare £30 you have now. It's all debt and it won't particularly help you to concentrate on the mortgage as opposed to any other unless there's a specific reason for maximising the equity in your house as opposed to your overall net worth.