i want to make overpayments on mortgage

moomi

but i'm not sure how much I can afford & how regularly I can do it. Will anything i overpay make a difference? I was hoping to do maybe £50 a month if I can. Im on a repayment mortgage- got about 19 years left. some of it was a fixed rate from previous mortgage then when we moved we added another £60k-ish on a tracker i think- must look this all up!- mortgage was £101500 3 years ago,now about £97,000. We pay around £600 at the moment.

charleyroo

hello,

just put the figures above into the moneysavingexpert overpayment calculator;

Overpaying £50 a month would save you
£4,764 in interest alone,
and mean you pay it off in full
2 years and 1 month earlier.

http://www.moneysavingexpert.com/mortgages/mortgage-overpayment-calculator

Thrugelmir

moomi wrote: »

]Will anything i overpay make a difference?

Whether its £10, £50 or £500, Any amount you overpay will make a difference in the longer term.

As reducing the capital balance owed will result in you paying less interest over the term of the mortgage.

So while the benefit may not be apparent immediately. When you come to move house for example you will have more equity in the property. Should you stay in the property then the mortgage will be paid off quicker.

So you'll have the money you currently spend on paying the mortgage to do with as you wish.

moomi

the aim is to reduce the term overall. We are due a review next year- as i say i need to look at it all in more detail really. the fixed rate bit runs until september 2012 & the tracker is a lifetime thing (well term of mortgage). so will speak to ifa who comes to work a couple of months before then. Some months I'd like to think i could pay a bit more, depends on how much childcare we wont be paying now both at school full time from Sept this year. Easy to find something else to spend it on though!

moomi

is there a calculator to work out how much you would need to overpay to be Mortgage free before a certain date- say 2020

Thrugelmir

moomi wrote: »

Easy to find something else to spend it on though!

Set up the overpayment by means of a standing order. Easy to do if you use on line banking. You can then "flex" the overpayments to what you can afford.

By making a regular payment then you can't spend the money on something else. As the money's left your bank account. A good discipline as well. After a while you find overpaying addictive and an incentive to manage your money even better.

Speak to your lender if you are unsure if you are allowed to overpay.

Even £10 a month is a start just to get the ball rolling. Over 19 years that's over £2,200 of capital repaid without taking into account the interest saving as well.

moomi

update- spoke to halifax today- they said i can make overpayments but cant apportion the overpayment to the fixed rate part of the loan (higher rate at 5.79) but just said it would come off the balance in total. She didnt sound too sure mind! I have 18 years & 7 months left, part of mge on 5.79% fixed rate & rest on tracker at 1.04% (above BOE base rate im assuming). She said if i wanted to start a new product would have to pay an early repayment penalty of £1380.84- owch!!!!!

DVardysShadow

moomi wrote: »

update- spoke to halifax today- they said i can make overpayments but cant apportion the overpayment to the fixed rate part of the loan (higher rate at 5.79) but just said it would come off the balance in total. She didnt sound too sure mind! I have 18 years & 7 months left, part of mge on 5.79% fixed rate & rest on tracker at 1.04% (above BOE base rate im assuming). She said if i wanted to start a new product would have to pay an early repayment penalty of £1380.84- owch!!!!!

Send the money and in your covering letter state what account you want it putting to. Keep a copy. Every time. You can bet your bottom dollar they will be too idle to tell you that what you are doing is wrong or to explain it in writing. So you will ultimately get your way.