Overpayments help please

reliable65

Just got statement from Chelt and Gloucester

Ive rounded figures up

Basically i took out a 20 year mortgage in June 2006 for £33,500 on a 5.25% fixed 7 year rate (ENDS JUNE 2012)

Statement today states we owe £17,000 so i have just sent a cheque off for £1700 ( the 10 % allowed without penalty costs)

My monthly payment was £226 a month but i have been paying double this for the last few years ( could i say up the monthly payment to say £800 a month without occuring any penalty costs etc)

I am wanting to pay mortgage off asap and if i wait until June 2011 i will only have to pay 1% of amount repaid plus £225 closing admin charge

i have £15000 in an isa paying 2.8%

whats the best plan of action to pay this mortgage off?

Thanks for looking

wantabetterlife

One way of getting round the 10% overpayment allowed is to reduce the term of your mortgage so that the reduced term equals an £800 per month payment. Your lender may charge you to change the term...i am with the halifax and they dont charge. You also need to check if they allow you to change your term back if you need to incase of unemployment etc.

Your mortgage interest rate is a lot higher than your isa, but obviously you want to have some money in savings...if you reduce your term you could drip feed some of your savings into the mortgage and get rid of it really fast, but this depends on your circumstances such as job security. Hope that helps

reliable65

wantabetterlife wrote: »

One way of getting round the 10% overpayment allowed is to reduce the term of your mortgage so that the reduced term equals an £800 per month payment. Your lender may charge you to change the term...i am with the halifax and they dont charge. You also need to check if they allow you to change your term back if you need to incase of unemployment etc.

Your mortgage interest rate is a lot higher than your isa, but obviously you want to have some money in savings...if you reduce your term you could drip feed some of your savings into the mortgage and get rid of it really fast, but this depends on your circumstances such as job security. Hope that helps

Thanks very much

we already have money saved besides the isa so wouldnt be too bothered about using the isa money