Mortgage redemption payment calculator?

always29

Hope one of you can help!

Had a fruitless and frustrating call with the "lovely" Halifax earlier about making a lumpsum repayment. We have 2 mortgages running in paralell - a smaller one fixed (6.64%) and a larger on their svr (3.5%). Was trying to get them to tell me what the interest would be on the fix would be until the ERC expires on 30.11.11 so I could decide which loan to pay towards to but the bloke on the phone was clueless! Had anyone got a calculator that might calculate the interest over this period or explain how I could use one of the MSE ones?

Thanks!

Thrugelmir

always29 wrote: »

Hope one of you can help!

Had a fruitless and frustrating call with the "lovely" Halifax earlier about making a lumpsum repayment. We have 2 mortgages running in paralell - a smaller one fixed (6.64%) and a larger on their svr (3.5%). Was trying to get them to tell me what the interest would be on the fix would be until the ERC expires on 30.11.11 so I could decide which loan to pay towards to but the bloke on the phone was clueless! Had anyone got a calculator that might calculate the interest over this period or explain how I could use one of the MSE ones?

Thanks!

Make the maximum overpayment on the 6.64% fix. No need for a calculator.

always29

But the fix has a £1,256 ERC on it until 30 Nov 11 - how can I work out what interest we'd be paying on this part of the loan over this period?

edit: was being thick - was looking at the capital repaid thinking it was v close to ERC, doh! The interest over the next 12 months is more than 3 times the ERC, total no brainer, you were right thrugelmir, thank you!

TrickyDicky101

You need to state what your current balances are (on both fixed and SVR mortgages) and what your current repayment amounts are (on both) and preferably the term (it just makes working things out easier). Also, please indicate if you can overpay on the fixed mortgage without any penalty (sometimes this is 10% of outstanding balance per year - should be listed in your terms & conditions).

Generally, it will likely make most sense for you to overpay the most you can on the fix without incurring a penalty and the balance of your lump put towards the SVR.

getmore4less

If you are not in a possition to make full overpayments from future income then it is important to work out how much to hold back and overpay by the maximum each month, and don't forget savings interest.

Also make the overpayment penalty outside the loan this saves a bit also.

eg £5k available to overpay

interest rate say 6% ERC 2% savings 2%(after tax) max overpayment without penalty £500pm

£500 saves £2.50pm less £0.83pm interest but costs £10erc.

So you keep back 10/(2.50-0.83) 5.9 months worth say 6 so £2k left to overpay.

Overpay £2k and the charge is £40 overpay by £1960 and the charge is £39.2 so you save another 80p

Adjust for your own real numbers.

then you need to look at the savings against the SVR portion to see which is best.

Do not expect a lender to do this sort of calculation.