small overpayments to mortgage are they worth doing ?

Bluemeanie_2

It's amazing the difference small OPs can make. Have you put your figures into the calculator on the main website? I find that so useful. Even small payments reduce loads off. On mine even a pound a week made a difference of a year!

I took my mortgage out on a two year fix that was about 1.5% higher than we could have got. And it was a high LTV (95% this was in Jan 2008), due to my ex having bad credit we were with Accord. Course the interests rates dropped, I went into negative equity etc. My payment was £527 a month over 35 years.

Fast forward nearly 4 years, (We did a transfer of equity so it is my sole name now, neg equity worked in my favour as he did not want a payout, he just wanted rid).

I managed to reduce the mortgage to a 90% LTV and re-mortgage with HSBC on a decent tracker rate and kept OP so now swapped to their 80% LTV rate. I have also reduced the term to 30 years (I would rather keep it over longer on payment, rather than commit myself to a massive standard payment, if that makes sense) My standard payment is now £338. However as I was always used to paying £527 on my budget I have just carried on paying the difference as OP. Plus anymore I can manage.

Sorry to hijack with my own story!

But yes, they are definitely worth doing! I am aiming to be mortgage free in another 7 years!

opinions4u

A very rough calculation ... an extra £25 a month will knock around 2 years off the term of a £100k mortgage at 5% originally schedules over 25 years.

Get it up to £60 and you can save 5 years of mortgage payments.

Derivative

short_cake wrote: »

Yes is the answer to your question up to £25pm is all i can afford as we speak
how thats questionable i dont know - some of us would love to pay 100's a month extra off
im trying my best to keep head floating above water and to make life a bit easier and i thought the saying was every little helps !

so if it does help by paying my £ 10/20/25 a month more then thank you i will try and do that

Okay. My apologies if I seemed a little judgemental.

It is definitely worth overpaying as much as possible, otherwise you will be in trouble when interest rates rise.

originalmiscellany

I'd like to say that all other people on this thread area talking rubbish, but I'd be lying. We're in a fortunate position to overpay, but as Gallygirl says, every pound you overpay is 2 saved in the overall mortgage - so £25 a month is you saving £50 in interest in the long run (plus the £25) so that would be well worth it. If you are struggling with your OH, explain that stat to him/her and then that should !!!!! their conscience in overpaying.
So do it, even pennies make such a difference.