Calculating mortgage interest question

Phirefly

I'm trying to work out how much the our lenders' SVR will need to rise in order to make it worth opting for their fixed product on a repayment mortgage. This is not the question I need answering here though.

I'm struggling to calculate what total interest we will be charged for the year in each scenario (interest is calculated yearly)

Facts:
Our current fix is 5.89% coming to an end in April '10
Current monthly repayments are £793.94
Yearly interest accrued 09-10 = £7608.43
outstanding loan will be £127256.71 as at April '10
27 years remaining

Fix option
5 years at 5.99%
Monthly repayments £802.00
No overpayment

SVR option
current rate 2.99%
Monthly repayments £578.00
Monthly overpayment £216.00

My question is how do I work out how much interest will accrue for the next year in each scenario? Obviously I am fully aware that the SVR is not guaranteed, but talking hypothetically were it to remain at 2.99 for the year.

Thank you.

beecher2

If you type locoblade into the search forum screen, you get a great tool which you can d/l and add your figures to. You can compare two mortgages and will get all the information you need.

Phirefly

great stuff, thanks

getmore4less

To do a comparison properly I prefer to make the payments the same and look at the outstanding amount at the end of the period.

The starting point for each needs to reflect the difference in total cost.

if you say keep the SVR ow for 1/2 the term ou can then see what the rate needs to go to to cost the same as the fix.

The overpayments can make a big difference

Phirefly

Thanks everyone. I can't get that link to work, GG...

*edit - not that it matters. Mr P has just got home and declared that theres no chance we're fixing...

beecher2

Phirefly wrote: »

Thanks everyone. I can't get that link to work, GG...

*edit - not that it matters. Mr P has just got home and declared that theres no chance we're fixing...

Doesn't sound very democratic in your house!

Phirefly

beecher2 wrote: »

Doesn't sound very democratic in your house!

Heheh in truth, its his gut feeling but backed up by the figures in locoblade's spreadsheet. Plus the fact that a 5 year fix with big redemption penalties is wholly unsuitable to individuals with our risk profile and plans for the next 2-3 years.

I like to let him think he's making the decisions from time to time...