Mortgage Advice Required

madhusudhan

A little bit different story though:

Story so far: I've taken a 3yr fixed term mortgage from HSBC at 5.39% a year back (about 21 months to go before I get out of the repayment charges of 3000). HSBC will allow only a repayment of 20% of the monthly payment. That means if my monthly payment is 500, I could only pay 100 extra to fill the capital blackhole. I've taken interest only option (Home Start) and paying this 20% overpayment since then.

Story that's rolling: I started to look out for deals. My main criteria was to make some additional overpayments as I got frustated to see the whole mortgage sitting like a mountain never reducing. I've done some maths and conlcuded that if no one is waiving off the redemption charges, there won't be that much of saving in remortgaging.

I've seen a HSBC Fin Planning Manager(FPM) and discoverd that I could change to Capital repayment mode(withought paying charges and fees) although it would be a continuation of my fixed deal. That means, I don't have to pay the redemption charges, but my deal will change from interest only to capital payment.

After looking at some of your comments, I ignited re-thinking brain- weather I really should go for capital or stay with interest only. Any pointers are higly appreciated!

Either FPM or mortgate centre(FPM called the centre) couldn't tell me what proportion of my monthly payment goes towards capital when I take capital payment. I suppose there would be some rought formula.

I learn a lot from you guys. Hat's off to all who save pounds in our pockets!!

/M

mrcow

madhusudhan wrote:

Either FPM or mortgate centre(FPM called the centre) couldn't tell me what proportion of my monthly payment goes towards capital when I take capital payment. I suppose there would be some rought formula.

Cheghead posted a link to this site a few weeks back. It's in USD, but I love it (I know I'm sad!) as it gives you a full repayment/interest breakdown month on month....

http://www.amacmortgage.com/amac/calc_amortization.asp

After having my fingers burned a little with interest only, I'd always prefer a repayment mortgage (with as much of an overpayment as you can manage), but this is a personal preference, as I feel that I'm much more in control of what's going on, but there are others on this site who are much more qualified to comment on this.