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Offsetting - reduce term, or monthly payment +overpayment?
debtdesperado
Posts: 379 Forumite
I hope someone can help!
I have a repayment mortgage, and have been overpaying it by a little bit each month.
I have just found out that I can add an offset facility to it for free. I am trying to build up an emergency fund, and think that it would be a good place to keep it.
It gives me two alternatives to use the interest saved by the offsetting - either to reduce the term, or to reduce the monthly payment.
If I took the reduced monthly payment option, I would add that to my overpayment.
Has anyone worked out a similar calculation? I have looked at various overpayment/repayment calculators but haven't seen one that will show me which course would be better. Any suggestions gratefully received!
I have a repayment mortgage, and have been overpaying it by a little bit each month.
I have just found out that I can add an offset facility to it for free. I am trying to build up an emergency fund, and think that it would be a good place to keep it.
It gives me two alternatives to use the interest saved by the offsetting - either to reduce the term, or to reduce the monthly payment.
If I took the reduced monthly payment option, I would add that to my overpayment.
Has anyone worked out a similar calculation? I have looked at various overpayment/repayment calculators but haven't seen one that will show me which course would be better. Any suggestions gratefully received!
0
Comments
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Hi there, sorry, I can't advise so just giving you a shameless bump
MFW Start Date 1.4.08. Updated 23.1.18. MFW date 1.8.18
Original Mortgage o/s £187,643 / £71,904 (-115,739)
Repay o/s £92,661 / now £55,900 (-36,761)
Int Only o/s £94,982, now £16,004 (-78,978)
Total daily interest £1 [a) £0.77 b)£0.23
Total OP's:2018 target £TBC YTD £1,9950 -
who is this account with?
does the interest rate increase if you add the offset?0
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