Help with overpayments

barcabod

We currently owe £38000 on our mortgage and pay£460 per month.The interest rate is 2.5%,not tied in on anything .We have 7years 9months left to pay.If we pay £285 per month overpayment what will be the total time we have left to pay ?I have tried to work it out and have come up with 4years 6 months is this correct.We also put away £300 savings per month should we lump it all on the mortgage ,if so what will that do to the time left on mortgage.
Hope ive explained it right, first time here and looking to be rid of mortgage as soon as possible without leaving nothing to enjoy at the end of the month

alfiesmum

Pop your figures into here. It doesn't matter that it has the dollar sign, amounts are exactly the same.

http://www.bankrate.com/calculators/mortgages/mortgage-calculator.aspx

If you click show amortization as well, it's show you the balance at every stage along the way too. It's addictive mind you!!

poppyoscar_3

Hey i love that calculator - most of therm won't let me put in sub £10k and this one does! Thanks alfiesmum! PO xx

barcabod

Thanks for the calculator and yes its addictive.I was almost on the mark with my calculations .Lets hope the interest rate does'nt start going up!!!!
Any advice on if i should put some or all our savings money per month to mortgage?

chirpchirp

Regarding the savings and whether to put it on to the mortgage:

Do you have emergency savings 3-6 months worth dependent on your job security?

Are you savings giving you a higher rate than your mortgage? If not, why not? You should be able to get a higher savings amount than your current mortgage deal!

Is your mortgage rate fixed or is it a tracker/SVR? If it is interest rates could rise quickly, at which point it is worth putting money into the mortgage at the time interest rates begin to rise.

Basically, normal advice is to ensure you have savings equal to six months income. If you can get a higher interest rate on savings, then save. Consider your job security and if you think there is a chance you may need benefits at a later day pay any savings in excess of 16k off the mortgage. If you do this too close to when you need to claim benefits this could backfire and be seen as a deliberate attempt to offload assets.

Good luck with your mortgage free journey, hope the above helps.

Are your savings totalling more than 16k? If so, pay the excess towards the mortgage as if you were to become unemployed then you wouldn't receive benefits!

Ed_Zep

That's a nice calculator and this one's very good, too:

http://www.drcalculator.com/mortgage/uk/

barcabod

Job security is as stable as anyone elses so i dont foresee any problems there for both me and wife.
We have around £5000 of savings £2000 of which is in an isa and £3000 in a normal savings account.
Mortgage is on SVR of 2.5%
I have been wondeing if the time is right to get tied in ?but am sticking to standard rate for time being.