wow - didn't realise the possibilities

leni

We hope to be debt free by next April (just the mortgage remaining £61k).

I've just been reading threads and came across one where someone said they'd taken their mortgage over 20 years because their wasn't much difference in the monthly payments, just the interest over the term.

So I set about searching and if we paid an extra £80 a month, we'd knock 7 years off our mortgage!:T we're tyed in until next april anyway but when that debt free time come's I'm gonna look at remortgaging but taking it our over a shorter term (which never even entered my head )

Destined_to_be_skint

That was me! The banks don't tell you about this because the longer your loan term, the more money they make out of you. Taking on a 35 or 50 year mortgage like some people do when desperate to get on the property ladder costs you a lot more in the long run.

nrsql

The reason the shorter term saves you interest is just that you are paying more per month and so paying off more of the capital.
An alternative is to take out the mortgage over the longer term but overpay assuming that it allows it.

What you do not want to do is commit to higher payments but then rack up charges and interest elsewhere because you are struggling to cope.

leni

nrsql wrote:

The reason the shorter term saves you interest is just that you are paying more per month and so paying off more of the capital.
An alternative is to take out the mortgage over the longer term but overpay assuming that it allows it.

What you do not want to do is commit to higher payments but then rack up charges and interest elsewhere because you are struggling to cope.

advice taken onboard but as of next April we'll be £550 better off debt wise a month plus OH is getting a £6k payrise in a few months because his shift pattern is changing!:T

cupid_s

when i remortgage i'm hoping to cut the 21 years I have left on my mortgage down to 6!

and i still plan to make overpayments lol

Gorgeous_George

Overpaying obviously reduces the term and borrowing over a shorter period also has the same effect. It's not rocking horse science

What people should avoid is taking out higher (APR) cost loans or credit cards to indirectly fund the overpayments.

Then there's a life to live. I could have one or two less foreign holidays (early 40s at the moment) and pay my mortgage off by the time I'm 50. I'd then have more expendable income in my early 50s and could afford more holidays than I have time to take.

I'm happier to spend it now than to have it when I'm waiting to be dead.



GG