Mortgage Interest Question

ssnsk

Morning All,

In about 5 months time my current mortgage deal will expire (2 years tracker).

My question is, if i were to move mortgage providers, would there be any interest rebate due when the new deal that i take out, pays off the old deal.

I have been told that in the first couple of years of your mortgage you pay mostly interest, so I am unsure of how much i would need to borrow this time round.

the example is as follows:

I borrowed £110,500 and pay £582.76 per month over 30 years, so at the end of the two year period, I will have paid £13,986.24

Does this mean when i mortgage again, I will only need to borrow roughly £96,500, or is the capital that has been paid actually a lot less (does anyone know an easy way to calculate it)?

Thanks in advance.

kingstreet

There is no interest rebate.

You need to ask your lender for a settlement figure around the point you think you might remortgage elsewhere.

The redemption figure will be made up of the outstanding capital, any discharge fees and interest for the period from your last payment upto the projected repayment date.

Thrugelmir

Every month your payment consists of part interest and part capital. Interest is calculated daily and charged monthly. So each month you pay slightly less interest and more capital.

After 2 years you'll have repaid very little capital off the mortgage. A mortgage is a long term commitment. After 20 years you'll still owe 40% of the original capital advance.

poppy10_2

ssnsk wrote: »

(does anyone know an easy way to calculate it)?

There are several online calculators available - try this one (you only need to fill in the first three boxes)
http://www.calculator.net/mortgage-calculator-uk.html

Assuming an interest rate of 4.85%, these are the results



At the end of two years you'll have paid approx £3,400 off the balance, the rest of your money has gone on interest payments.

ssnsk

Thanks for responding guys