currently overpaying on mortgage...

hi all,
iam currntly overpaying £30 pm on my mortgage.
the bloody mortgage never seems to go down!!!!!
i borrowed 91k nearly 3 years ago now and its only gone down to 86k
i have just started overpaying by £30 pm ( just to start with, made 4 payments so far)
can anyone encourage me and quickly illustrate how this is benifiting me in pulling the capital down quicker with a few sums please...
the mortgage is £512 on 86k capped at , not sure 5.5% or summat ( i know this sounds dumb, but i have only just 'got into' mortgage facts).

can anyone help?
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Replies

  • Here you go James3333 just plug in your figures and see how much interest you are already saving :)

    http://www.fool.co.uk/mortgages/mortgage-calculator.aspx
    :T:j :TMFiT-T2 No.120|Challenge started 12.12.09|MFD 12.12.12 :j:T:j
  • THANKS FOR THAT.
    really good to see 11k saving and only 23 years rather than 26!
    but i was really wondering about the actual £30 per month affecting the interest and capital.... how do i work this out?
    i.e by adding the £30 to the £512 is it simply adding £15 to the capital payment and £15 to the interest payment?
  • nrsqlnrsql Forumite
    1.9K Posts
    Part of the Furniture 1,000 Posts Combo Breaker
    Your repayments will be paying all the interest and a very small part of the capital so any overpayment will come off the capital.
    If they recalculate you should see a reduction in the repayment amount.

    It's worgth ringing the mortgage company and asking them about the details of your mortgage.
    Especially about overpayments - as you are on a capped rate there may be penalties for overpaying.
    Also check that the overpayments are regarded as a capital payment (not going into a separate account), when interest is calculated (it should be daily - if it's annually then there's no point in paying until the end of the year - that's unlikely now but it may be monthly).
  • its with the halifax and i spoke to them a few months back...
    they said i can overpay up to 10% of the outstanding balance ands it will be reducing my term and amount to pay, rather than reducing the repayment amount....
    does this sound ok?
    p.s i have a penalty for 'early repayment charges' i assume this is if i clear the full mortgage or move to another lender?
  • mirrymirry Forumite
    1.6K Posts
    is that 10% overpayment each year of the outstanding balance ?
    or 10% for all the time your on a capped rate (say 5 years for example)
    Kindness costs nothing :)
  • ooops.... i might have just made a BIG mistake, but i have never been told by the halifax.....

    just read this about FIXED RATES.....
    Make overpayments – you can do this at any time. You only have to pay a charge when the mortgage deal you have chosen is subject to an early repayment charge. Even then you can pay up to 10% of the amount on that product in any 12-month rolling period free of charge.

    but mine is not a fixed rate, its a tracker capped.

    this is the TRACKER description...
    Make overpayments – you can do this at any time. You only have to pay a charge when the mortgage deal you have chosen is subject to an early repayment charge. Even then you can pay up to 10% of the amount on that product in any 12-month rolling period free of charge.

    PLEASE TELL ME I HAVENT MADE A FATAL ERROR.....
    I WILL GO MENTAL WITH THE HALIFAX IF THEY HAVE ALLOWED ME TO OVERPAY AND NOT TOLD ME ABOUT AND PENALTIES

    From this i understand that i can overpay up to 10% WITHOUIT CHARGE..... CORRECT?
  • nrsqlnrsql Forumite
    1.9K Posts
    Part of the Furniture 1,000 Posts Combo Breaker
    It sounds like they allow 10% per annum free of charge on fixed and tracker.
    I would be surprised if they don't allow that on the capped tracker.
    So currently you should be able to overpay about 8k in any 12 months (the figure will go down as the mortgage amount goes down).

    Give them a call and ask.
    At the same time you can ask about the outstanding amount on the mortgage, the rate and cap and what is happening to your payments (when they are applied and when the interest is calculated - hopefully daily).
    Mortgage companies are usually quite happy for people to call with question like this and should be able to answer quickly once you get to the right department.
  • I Will Do That , Cheers
  • Ivrytwr3Ivrytwr3 Forumite
    6.2K Posts
    Part of the Furniture 1,000 Posts Combo Breaker
    Forumite
    You only have to pay a charge when the mortgage deal you have chosen is subject to an early repayment charge.

    I THINK you are getting confused in that the early repayment charge is only payable if you pay off your full mortgage not overpayments (and that's only if it is applicable to your mortgage deal anyway).

    It looks like you have the same mortgage as i do, which allows each year for you to pay up to 10% of the outstanding balance. So, your £30 per month should come straight off the capital and therefore is a good thing you are doing.

    However, as the previous poster has pointed out:

    "At the same time you can ask about the outstanding amount on the mortgage, the rate and cap and what is happening to your payments (when they are applied and when the interest is calculated - hopefully daily)."

    As i have found that i am best off saving my overpayment in a high interest account and then at each 12 month pointmake an overpayment in one chunk.

    Hope this makes sense!
  • PaulxoPaulxo Forumite
    454 Posts
    £30 p month?

    Have you got yourself a mortgage pig???

    This has helped me greatly. Every time I think - 'hmm, bottle of wine would be nice', instead I put £5 in the pig. If I bow to temptation and get one I stil put £5 in so it costs me double to drink!

    I have cut down my drinking and my mortgage at the same time.

    My pig is bulging with coins and notes right now, but I'm not touching the money til 1 Jan.

    It works!
    Claiming against Nationwide £2500
    Others to come!
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