Nearing the end

mrs_T

We are due to be mf in june 2013, we have a £23k interest only mortgage @ 5.95% which will be more than covered by endowments maturing march 2011 and november 2012. Mortgage documents show we are limited to overpayments of £500/month and can incur a max early repayment fee of £750. I feel we should try and pay it off as quick as poss to save interest but need to explain to oh what we gain from making max overpayment each month, also can we pay lump sums in when endowments mature? He is willing to go to nationwide with me but I need to know what to ask. He says making any change to the mortgage at this stage will cost us more in admin fees than we will save. Should I leave things alone or is there still money to be saved?

RosieTiger

Put your numbers into a mortgage calculator which shouldthen tellnyou whether or not it makes sense

mrs_T

RosieTiger wrote: »

Put your numbers into a mortgage calculator which shouldthen tellnyou whether or not it makes sense

I tried the egg one but it said min term 5 years, I'll try some others. OK, I've looked at the sticky but I can't find a repayment calculator for interest only mortgages. Does anyone know of one?

dimbo61

If you can afford to make a £500 overpayment every month then do so as it will save you 5.95% interest.
Once the balance is down to say £500 then reduce the DD over whats left of the term.
Its better to overpay and have a nice nest egg ( the endowments) rather than need this money to clear the mortgage
Build up your cash ISA,s as well

mrs_T

I have another question which might seem like heresy on here. We are in our forever home and extremely unlikley to move unless the 3 kids have gone and we can't manage the stairs. Is increasing the mortgage the cheapest way of paying for improvements? I would love to get the garden landscaped because it's large but steep with no hard landscaping and to extend the kitchen which needs replaced but I'm loath to spend the money (savings) on a new kitchen unless we extend. What do I have to consider? We are both working f/t but are 46 and 52.

elwistua

Re the extension/kitchen/landscaping, depending on how much the work would cost and how keen you were to get cracking and how much the endowment that matures in March will pay out I would use the endowments for fund the improvements and do the improvements in stages and in the meantime start overpaying some capital from salaries should funds allow.