overpaying on an interest only mortgage

saram613

Can anyone help me please, im looking at making extra monthly payments on the capital of my interest only mortgage. My mortgage is for £105,000 and is on a fixed rate of 5.89% with 17 years remaining. I am looking at paying £350 per month off the capital.

I want to know how many years i would save/ how much money i would save but i cant see to find any sites that give you the figures against an interest only mortgage.

Can any one help???

Many thanks!!

_bankrupted

Paying only the interest for 17 years

Interest payments = £105,136
Capital Repayment = £105,000

TOTAL COST = £210,136


Paying £350 off the loan each month

Interest Payments = £69,565
Capital Repayment of 350 over 204 months = £71,400
Outstanding Capital = £33,600

TOTAL COST = £174,565

TOTAL SAVING = £35,571


Discalimer,

Done very quickly after a glass of wine, I hope I haven't made a mistake

Pont

I'm well and truly impressed _bankrupted! What are you like after a bottle?

_bankrupted

Solvent!!!

theartfullodger

Cheers!

Lodger

waveneygnome

If you currently owe 105k and pay 5.89%pa; thats a monthly interest only mortgage payment of £515.................if you then add/overpay your £350 extra per month..............thats a total payment to the mortgage co of £865.

If you kept this figure the same i.e. kept paying £865 per month, every month, then you would save even more & pay off your mortgage earlier.

Interest Payments = £55,033
Capital 'overpayments' over 185 months = £105,000
Outstanding Capital = £0

TOTAL COST = £160,025

TOTAL SAVING = £50,111...and your mortgage will be paid off in full in 185 months.

(these figures and _bankrupted figures are both correct. _bankrupted has assumed that as your interest payments reduce (due to the £350 overpayment), you just continue to pay what ever the new reduced interest payment is PLUS the £350 overpayment. I have assuemd that you can afford to pay £865 every month, and continue to pay this amount. By _bankrupted calculations, in month 185, you will be paying £165 interest plus your £350 overpayment = monthly cost of £515. In contrast with my calculations, you will still be paying £865 in month 185.....but it will be your last ever payment)

Hope this all makes sense.

saram613

sorry for the lengthy delay in responding to those who helped answer my quiery. circumastances etc....

okay, so i have as of January set up a standing order to pay £350 overpayment off my interest only mortgage, Januarys payment has obviously gone out and Februarys will go in 2 days time.

I do intend to keep my mortage interest only payment as it currently stands which is £500 (or there abouts) so i will be making a regular monthly payment of £850. If i have read the replies correctly and understood them, i will still be paying the mortgage to the full term (think its abt another 16 years) but i will be saving a small fortune in interest? is that right or does the mortage term, reduce aswell?

Thanks!!

VIGILANT22

does the conditions of your fixed mortgage allow you to overpay by 70%????

saram613

70% where do you get that figure from? im confused sorry?

£500 mortage amount plus an overpayment of £350 is £850....?

VIGILANT22

if 500.00 is 100%, then 350.00 is 70%, most (not all) fixed rate mortgages only allow you to overpay by 10%.......

saram613

ah i see!! no, with nationwide you can make overpayments of up to £500 per calendar month.