My Mortgage

leeegglestone

I have an Alliance n Leicester Mortgage, still waiting to make my first payment
Its 5years fixed term 4.84 %. You can make an overpayment in January of up to 10% of the amount borrowed. which was £52K

Im in two minds to whether to use £3000 to buy a Car or save it and put it into the Mortgage in January.

Does anyone know if I ask A & L. They will send me a list of the reduced monthly payments a long with how the Payments. or tell me in advance what my Monthly would be after January or is it too soon in advance (taking into consideration i would have paid all my set payments up till then)

I have it on 30years, although I dont think Inputting £3000 will make it affordable at a 25year duration. In about 5years hopefully before I fall onto the higher rate or remortage, i will have a Bond which Matures & should give me an additional £3000, this i already planned to input into the Mortage


At present I have £10K savings and need to take £3500 out of the Pot for the Car over the year, (including as an additional £1900 is on 0% purchase card, meaning £57 a month min payments)
I can afford the repayments.

Am in two minds to what is best for my future. my current car is not as fuel efficient

Joe_Bloggs

@leeegglesone
I think you should consider getting to grips with some of the free financial tools that are available. This mortgage calculator is not the best, has too many american based features, but the amortization schedule calculator has very flexible overpayment features. Do you wish to reduce the term with your overpayments or reduce monthly repayments ?
If you are paying £274.08 per month then by end of December you will owe approx 51,478. A single 3K payment in January will either shorten the term by
approx 40 months or reduce the payments to around £257. So much of this depends upon what payments you make in May.
My other free financial tool would be Excel or for free, OpenOffice calc.
J_B.

leeegglestone

Im not sure how much i will pay in May. its greater than the regular payments.

So if in Jan I input £3000.
I can either have my repayments reduced to £257, or keep the same repayment of £273 - which would mean I would pay back my Mortgage 40months earlier??

Is there a way to work out overall how much interest im saving on the whole mortgage by inputting £3000 and keeping payments at £273

Joe_Bloggs

Yes there is.
1) Use the calculator I mentioned.
2) Compare the end totals in the either case.
Compare notes on your findings. My guess is you save close to 40x monthly repayments if you shorten the term but keep with the original payments. Unfortunately it is the last 40 payments you save money on and not the first.
J_B.

leeegglestone

couldnt get it to work when i entered to overpayment

Joe_Bloggs

For a single overpayment just put the same number in the from and to section ie 9 and 9 and type in the amount. If there are input problems then select the active input window on the right side with left click on mouse. and drag along to the right. I have just entered a £5 billion overpayment this way.
J_B.

leeegglestone

This is what i do

Add prepayments - single payment - £3000 - appy extra

and i get a message about using edit boxes
:S and the £3000 isnt done.

No idea what that meant about

Joe_Bloggs

You probably have blank fields in the interest rate, term in months, loan amount section. Press the return to amortization button on the overpayments button and fill them in first . Then press Create or Refresh Shedule, before trying overpayments.
J_B.