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Best way to pay off final £15k of Mortgage

edited 30 November -1 at 1:00AM in Mortgage-Free Wannabe
14 replies 1.6K views
pcathletepcathlete Forumite
6 Posts
edited 30 November -1 at 1:00AM in Mortgage-Free Wannabe
Hi, we have 15k left on our mortgage with Halifax, our current 3 year fixed rate ends in March. It has 25 years left in theory. We have been paying an extra £100 a month on top of the regular £200. The property is worth approx £100,000. I am lead to believe that we can only pay 10% of the mortgage without penalties so i am concerned that will slow down our aim to be mortgage free. We don't have savings to cover the 15k. Any advice and tips would be appreciated. :rotfl:
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  • blueberrypieblueberrypie Forumite
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    It's likely that your tie-in on your mortgage ends at the same time your fixed rate does, and after that you'll be able to overpay as much as you want without penalties. Will your mortgage go onto Halifax's SVR after March? It might well be lower than your current interest rate.
  • It's likely that your tie-in on your mortgage ends at the same time your fixed rate does, and after that you'll be able to overpay as much as you want without penalties. Will your mortgage go onto Halifax's SVR after March? It might well be lower than your current interest rate.

    Due to have a meeting, but will probably go on SVR, is this best thing to do ?
  • blueberrypieblueberrypie Forumite
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    Given the small amount left on your mortgage...probably, but only you know all the circumstances. If the SVR rises, it will increase your payments, but your mortgage is pretty small at this point, and your payments relatively low, so a rise in SVR wouldn't affect you hugely. You could go for a fixed rate - pros: you'd know how much your payments would be for as long as your fix lasted; cons: the fixed rate would almost certainly be higher than the current SVR, there might be product fees involved, you'd be limited as far as overpaying is concerned.

    Who is your meeting with? If it's with Halifax, bear in mind that the "advisor" is there to sell you a Halifax mortgage - they don't make anything out of you sticking to what you've got.
  • mine is a lifetime tracker with the hally. it's currently at 2.04% (i think) and i can OP as much as i like, no penalties. it was initially for a £15k mortgage too.
    po xx
    :D2010 MFW Challenge No. 112 Mortgage paid in full 27/08/10 I was MF!!!:D
    But now I'm not - (Joint) Mortgage £104704.
    New MFW target £5000 overpayments by 31/12/2105 £400/£5000 = 8%
    SAVINGS TARGET - £25000 by 31/12/2015 £13643/£25000 = 55%
    No 17 Lewis Lane
  • oh and as far as i remember there was no set up fee either. most lenders wouldn't touch me because the mortgage was too small!
    :D2010 MFW Challenge No. 112 Mortgage paid in full 27/08/10 I was MF!!!:D
    But now I'm not - (Joint) Mortgage £104704.
    New MFW target £5000 overpayments by 31/12/2105 £400/£5000 = 8%
    SAVINGS TARGET - £25000 by 31/12/2015 £13643/£25000 = 55%
    No 17 Lewis Lane
  • dimbo61dimbo61 Forumite
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    looking on the Halifax website at 2 year fixed deals( 4.29%) for existing customers with no fee your mortgage payment to clear the mortgage in 2 years would be £653 a month ! Interest cost over 2 years is £679
    Now if you went onto the Halifax SVR which is 3.5% at the moment it would still cost you £648 a month.
    If thats too much each month they also have a 3 year fix at 4.69% which would cost £447 each month and you would be mortgage free in 3 years ( with no fees to pay ) Interest cost £1109
    Your call GOOD LUCK
  • Thanks everyone for great advice, dimbo61 the monthly figures quoted are they overpayments or agreed monthly re-payments ?
  • Just to confirm we are with Halifax. thanks
  • SuzieSueSuzieSue Forumite
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    If you decide to go for a fixed rate in March, the best thing for you to do is to tell the Halifax how much you can afford to pay each month. Based on this, they will tell you what you can reduce your term to. You also need to check with them that you can also increase the term (and so reduce your payments) if your circumstances change.

    If you decide to stay on their SVR. then it doesn't matter what your mortage term is as there are usually no limit to the overpayments you can make.
  • dimbo61dimbo61 Forumite
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    Hi I used the website " whatsthecost" and put in your £15,000 mortgage over 2 nad 3 years so the figures would be your normal monthly mortgage payment!and not include any overpayment on top.
    Now if the 3 year fix at £447 a month is still too much the Halifax also do a 5 year fix at 5.79% with no fees ( its not worth paying £999 on your size of mortgage) that works out at £288.53 a month and you would pay £2311 in interest over 5 years.
    Who knows how the interest rate will go up or down over the next 2/3/5 years but you could be mortgage free and know what your interest rate would be for the rest of your mortgage
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