Mortgage free in 3 years please.

Joe_Bloggs

Since you can only pay 10% max in a lump sum per year and 500 per month max, you can pay more with extra monthly repayments. 10% would be £2500 say and 12 x 500 is £6000. No need to pay any early repayment charges at this time or change lender. Name your lender and perhaps others can chip in as to what you can and can't do with the specific terms and conditions of that lender.
J_B.

shimster1_2

Thanks joe bloggs i think that is what i am going to do but am open to any help i can get so my mortgage lender is Norwich and Peterborough BS. I may have misled you with the £500 a month because that is what we can afford to pay not what we are paying which is £282 per month and this means that we can only make it up to £500 a month and we will only have paid £18000 back in 3 years. Any help is greatly appreciated.

Dan29

It might be worth you posting on the Mortgages and Endowments board where several mortgage advisors post; they're the experts on things like this.

Joe_Bloggs

The Norwich and Peterborough are not very overt in their limited overpayment options. Apparently they are on a key facts illustration you get. The 10% of the balance per year option, ends up being very silly as the balance in question gets lower and lower.
Were you to make a 10% overpayment in September and every September until 2009 you would have just under £9500 left on the capital. You might have additional savings at this point to pay this off. It looks like you take the early repayment penalty on the balance outstanding. Some cruel lenders penalise you on the original capital borrowed !
My best guess is that the annual overpayments would be £2500, £1980, £1500, £1050. You would have to find a home for part of the savings during this period. Perhaps look into minicash isas. Possible drip feed a high interest regular savers.

In the final analysis you should talk your options through with your lender if you do not understand what you can or can't do with the mortgage.
J_B.

shimster1_2

Thanks joe bloggs but i have today talked to my lender and they have assured me that i can always pay 10% more off the original £25000, so that means i am as of this moment paying £496 a month until its low enough for us to pay it off altogether which should be about 3 years.
Thankyou to everybody who has tried to help and i have learned alot from all of you.
shimster1