fixed rate done in oct should i overpay more than the basic monthly payment?

kazzys51

hi all, our fxd rate is done in oct balance will be £20000 :jand were thinking of not going for another fixed rate and staying on the base mortgage rate.

the remaining term will be 2.6 yrs paying £645 p mth with nationwide.

for the past 3 yrs we have been overpaying £500 and want to stick with a total of £1145 hopefully, are we better taking a lower basic monthly payment of say £300 which will increase the term provisionally but then make an overpayment of £845 ? total still being £1145 as far as Im aware nationwide dont charge interest on any overpayments made(I think/hope) so then It would be finished sooner and cost less in interest in the long run ?Ive tried all the calculators but cant find any that dont put the interest on the overpayment so that in gives an accurate figure please tell me your thoughts or am i mad !:rotfl: thanks k

chirpchirp

Surely, £1145 is £1145 however you apply it? It would have the same effect on your mortgage. Besides which I don't think Nationwide allow you to pay more than £500 a month as an overpayment do they?

Have you tried searching for Locoblade's spreadsheet? It's great, and you may be able to do what you want with it.

VIGILANT22

Overpayment comes off the capital sum
When yr deal ends and yr on svr ..no restrictions on overpayments

kazzys51

hi thanks for ur replys ive been on a fxd rate for 2 yrs doing a 500 opayment every mnth and its came off the capital straight away but i dont know if you get that privilage when on the base rate i know you can pay any amount of opayment but dont know if it comes off the capital

kazzys51

hi chirp thanks for rec locoblade it looks really good but it dosent seem to let u change the initial mort balance just the ones in the yellow boxes have you done this b4 do u know how to? thanks k

kazzys51

hi all cudnt get the calculators to work this one out so done it manually took ages and the result i got was if paying the 300 as basic and 845 as op it will be finished 1 mnth early which saves £1316.00:eek: in interest if they let you do this i hope im phoning them 2moro morning to check this out thats not bad considering im not paying any extra just shuffling figures! no doubt there will be a catch !k

shell73_2

They only charge the interest once on remaining balance they cannot charge u anymore so if ur mortgage rate is say £300 u need to pay that any over payment will come off the balance so thats 800 off the balance hope that helps my calculation would be you will pay off 9800 in a yr aswell as ur min payment.

I know on our statement we get a figure charged to the account every quarter which is the min payment then what ever we over pay by reduces the balance

kazzys51

thats what i thought dont kno why i never thought of that b4 thanks shell

financialbliss

Hi kazzys51,

Something that's not been mentioned yet is that with a mortgage of "only" 20k come October, there may not be (m)any lenders who would want to take on your business - not much profit in it for them with a low loan value.

If you drop onto the Nationwide SVR (currently 2.5%) come October 2010, and continue paying off £1,145 per month, if the BoE base rate doesn't change from 0.5%, then I've estimated you will be mortgage free in March 2012

It's very likely that the base rate will start climbing though - after general election perhaps?

Financial Bliss.