overpayments how do they work ??

E@J'S_DAD

i know yhis may seem a bit dense but i have an 81000 mortgage. 6.8% fixed for another 3 years .dont want to move the thing at the moment due to other circumstances.
I want to overpay from jan 07 (500 a month)
reading the small print tonight and overpayments go to a seperate pot and pay interest.
used a mortgage calculator and worked out it will clear in 7 years.is this right as it seems a bit quick?
any help greatly appreciated
thanks
obviously im aware rates will change at the end of fixed period .just entered dates for the purpose of the exercise.

silvercar

Is your mortgage repayment or interest only. How long remaining?

I think 8-10 years depending on your answers to the above questions is about right.

I used the Egg mortgage calculator:

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

Shame you are sticking to 6.8% for the next 3 years, that seems high unless you have circumstances preventing you going to a high street lender.

safesound

Some advice if you (anyone) will; my mortgage is one that says that I cant overpay more than 10%. Does that mean I can contact them and ask them to take out the 10% on top of my monthly payments every month? ie. 10% of a 27K mortgage split over 12 months would mean adding an additional £225 per month onto the repayments.
Or would they accept a lump sum once a year for the 10%? and if so, is it as simple as ringing them and saying I want to pay X off? I appologise if that sounds really thick but I've never done it before and want to be sure they wont go "huh?"

thanks
sharon

regularsaver1

it depends on the lender

some cannot collect an additional amount, you sometimes have to send it monthly as an extra figure, or the lump sum option

i'd say give them a call to find out the best way, with them

MORPH3US

OP, how much are your normal monthly repayments???

I think the 10% means 10% of your monthly repayment.

I.e. if your normal repayment is £500 a month then you can only overpay by £50 a month = total £550 per month.

If you have £500 a month that you want to pay to it, but can only overpay less then would suggest paying anything else into a high interest account until your fixed term is over then pay it off in a lump sum!

M

regularsaver1

sometimes lenders give a concession of 10% for overpayments of the debt on a rolling year, rather than a monthly repayment