Part repayments. Is it worth it yet?

sat56

Hi.
Ive a fixed rate morg 4.29 % with halifax of 16686 outstanding. It currently has a erc of £368 on or before 31/10/2011. Monthly payment of £186

My previous morgage was all but payed off and i luved the feeling of banging overpayments into the halifax every few months and watching my balance and monthly repayments fall.

Im now in a position to start with overpayments again and just wondered if it was financially the best option.

Are my calculations correct.
for every £1000 repaid, i would save £42.90 interest but incurr £22 erc, thus saving £20.
Ive worked out the erc proportionally as it doesnt say on website how a part repayment and erc work. This could be totally wrong.

If i was to put it in a bank at say 3% i wud earn £30 .

Actually as im typing this im thinking were talking the difference of a tenner a year so it doesnt really make any difference if i repay or save.

I would appreciate if someone can cofirm my maths and comment on whether im way off mark.

thanks pete

getmore4less

Look at overpayments without charges

Look at shorter term to increase payments.

opinions4u

You should be able to pay 10% off the capital with no penalty on a Halifax mortgage.

The rest I'd bang in to a Halifax ISA (2.8% to 3.0%) and then withdraw a chunk to pay the next 10% lump off.

Actually as im typing this im thinking were talking the difference of a tenner a year so it doesnt really make any difference if i repay or save.

A tenner's a tenner. Better in your pocket than theirs.

sat56

Thanks for your replys, already used this years 10% free repayment in april so will have to wait till april nxt yr to make another.
Also have used up this years isa allowance.

blueberrypie

Some lenders will allow you to shorten the term of your mortgage without any fees. This means that your monthly payment will be higher, but the extra bit is not considered an overpayment (although the effects of it are exactly the same).