Small op's worth it? Advice needed please!

juicygirl

Hi everyone!

Serial lurker of this board here. Hope to join you all with my own diary soon. OH and i have just moved to our dream home. In order to secure this we took out a repayment mortgage for £233,750 over 35 years ( I know, I know!). It is fixed at 4.59% until end June 2012.

We fully intend to start making large overpayments later in the year ( I get quarterly bonuses and we do have a fair amount of disposable income), but at the moment we are spending any spare cash decorating and furnishing the house. In the meantime I have a question:

At the end of the month I usually have a small amount of cash left, usually around £100. Is it worth making such small op's on this size of mortgage in the meantime?

Thanks in advance!

Svenena

Try putting the figures into a calculator to see the effects. I just googled - this was the first one: http://www.whatmortgage.co.uk/calculators/fleximortgage.html

Peelerfart

In a word - yes.

Have a play with the calculator's and see what difference sustained op's make over a long period of time.

Prepare to be amazed

Froggy-G

juicygirl wrote: »

Hi everyone!

Serial lurker of this board here. Hope to join you all with my own diary soon. OH and i have just moved to our dream home. In order to secure this we took out a repayment mortgage for £233,750 over 35 years ( I know, I know!). It is fixed at 4.59% until end June 2012.

We fully intend to start making large overpayments later in the year ( I get quarterly bonuses and we do have a fair amount of disposable income), but at the moment we are spending any spare cash decorating and furnishing the house. In the meantime I have a question:

At the end of the month I usually have a small amount of cash left, usually around £100. Is it worth making such small op's on this size of mortgage in the meantime?

Thanks in advance!

Hi JuicyGirl! :j

Yes any OP, however small will make a massive difference, even a single £1.. Whatever you pay now, you won't have to pay interest on for the next 35 years!
Have a quick look at the OP calaculator (sticky at the top) and you will see what kind of difference it can make!

Good luck in your journey!

Froggy

jenova_2

Well, as they say - every little helps! If you've got some savings built up for a rainy day, and you want to OP, and your bank allows small OPs like that...I say go for it. You'll not earn more in interest by saving it than you will save by paying it off your mortgage because of your fixed rate, so if it's truly spare money then throwing it into the mortgage pot is a decent plan. Your decision obviously, but even £5 is worth it because it all reduces the total amount.

juicygirl

Thanks for the replies everyone. Think I will try to improve my rainy day fund a bit first then get started asap. We really want to get pay of as much as poss before the fixed rate is up so will really make a big effort!

CathT

Have just used the calculator on www.thismuchiknow.co.uk and overpaying £100 for the lifetime of your mortgage would knock off 73 months. If you up the ante once finished spending on the house etc you could really knock the months off. Be warned - it gets addictive

juicygirl

Thanks CathT! That is amazing! 73 months?!! Off to have a wee play with these calculators now.

You guys are brilliant! Good luck with all your MF journeys!

mintedmatty

Im sure ive read on here somewhere the average mortgage is repaid at £1.96 for every £1 borrowed? So although its a guide it is very handy to show how much you can save! Its definitley worth having a rainy day fund but all overpayments no matter how small will build up to make a big difference.

adwat

If you make monthly overpayments of £2000 you will be able to clear it in just under 10 years.

juicygirl

That would be amazing Adwat but I don't have quite that much disposable income!