Is there a better way?

108 Posts
Hi everyone
Thinking of remortgaging in order to repay my mortgage early and am looking for advice. I currently have an offset mortgage with First Direct at 5.7% but have no savings.
I have been looking at the figures this morning as follows:
Value of property: £155,000
Current mortgage: £134,500
Repayments Interest: between £580 - 620 per month
Overpayment: £340 per month
Have calculated that if savings remain as zero and I continue to pay at the present rate of around £950 per month it will take 32 years to repay the full mortgage amount. I thought I'd took it over a 17 year term.
Can this be right? Are my calculations wrong? Is there a better way?
Help would be much appreciated - am tying self in knots
Thanks
Mental Mentor
Thinking of remortgaging in order to repay my mortgage early and am looking for advice. I currently have an offset mortgage with First Direct at 5.7% but have no savings.
I have been looking at the figures this morning as follows:
Value of property: £155,000
Current mortgage: £134,500
Repayments Interest: between £580 - 620 per month
Overpayment: £340 per month
Have calculated that if savings remain as zero and I continue to pay at the present rate of around £950 per month it will take 32 years to repay the full mortgage amount. I thought I'd took it over a 17 year term.
Can this be right? Are my calculations wrong? Is there a better way?
Help would be much appreciated - am tying self in knots
Thanks
Mental Mentor
0
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hth
We've got a One account, and the monthly statement we get shows us what we need to pay to stay on plan (to repay our mortgage at the term we originally stated), and it shows us whether we are behind plan or in front. Does your First Direct mortgage have anything like that?
J_B. (A Fairly Dismal rate of interest.)
You're assuming that your £340 overpayment is going into a black hole, never earning any interest or reducing the balance of your mortgage. If you had an interest only mortgage and were saving the cash in £50 notes under your bed, it would take you 32 (in fact nearly 33) years to repay.
However every month you're paying interest on £340 less than you were the previous month. What you've basically got is a repayment mortgage where the amount of capital repaid is constant but the amount of interest (and therefore the total payment) falls each month unless you voluntarily increase the repayment amount.
Keep the payments constant however, compensating for the fall in the interest with an increase in the repayment element, and you'll pay the mortgage off sooner.
Debt now: £14,100 :rolleyes:
Debt free day: October 2008 :beer: