We'd like to remind Forumites to please avoid political debate on the Forum... Read More »
We're aware that some users are experiencing technical issues which the team are working to resolve. See the Community Noticeboard for more info. Thank you for your patience.
📨 Have you signed up to the Forum's new Email Digest yet? Get a selection of trending threads sent straight to your inbox daily, weekly or monthly!
How long until OPs affect capital?
Options
Calfuray
Posts: 1,003 Forumite
Obviously this will be different for everyone, but how long did it take before your OPs started affecting the capital of your mortgage?
I've not paid much in OPs being a skint student, but I'm feeling pretty disheartened, I owe more now than I did when I started here due to interest
I've not paid much in OPs being a skint student, but I'm feeling pretty disheartened, I owe more now than I did when I started here due to interest
0
Comments
-
Obviously this will be different for everyone, but how long did it take before your OPs started affecting the capital of your mortgage?
I've not paid much in OPs being a skint student, but I'm feeling pretty disheartened, I owe more now than I did when I started here due to interest
If you're not even covering the interest charges, in what way are they over payments?0 -
As far as I know, all overpayments should come directly off the capital... only your normal payments pay off interest.
Or is that just me...?Rule 7: If you're not changing it, you're choosing it.
MFW 2020: 1 Jan £92903.90 ~ OP £536.80/£500
MFW 2021: 1 Jan £89281.21 ~ OP £404.62/£500
MFW 2022: 1 Jan £85579.20 ~ OPs on hold.0 -
coldcazzie wrote: »As far as I know, all overpayments should come directly off the capital... only your normal payments pay off interest.
Or is that just me...?
Interest is added to the amount owed, any money you pay in is taken off the amount owed. If you pay in more than is added, your total owed goes down and vice versa.0 -
If you're not even covering the interest charges, in what way are they over payments?
They are overpayments because they are extra payments on top of the monthly ones?
It shows the effects of the OPs on the mortgage calculator but on the online banking the interest gets added daily so the amount keeps showing as climbing up.
I hope I'm not doing something wrong :S0 -
They are overpayments because they are extra payments on top of the monthly ones?
It shows the effects of the OPs on the mortgage calculator but on the online banking the interest gets added daily so the amount keeps showing as climbing up.
I hope I'm not doing something wrong :S
If you're making overpayments and the amount that you owe doesn't go down then it sounds like the overpayments aren't being applied. Talk to your bank and make sure they're not holding them in a reserve account but are actually applying them to the amount owed.0 -
Some lenders will only apply overpayments annually. Others as you pay them.I owe more now than I did when I started here due to interest
Which suggests you are not even making the minimum payments and are in arrears. In which case, there is no overpayment. Any extra you are paying is going towards the arrears.I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.0 -
Some lenders will only apply overpayments annually. Others as you pay them.
Which suggests you are not even making the minimum payments and are in arrears. In which case, there is no overpayment. Any extra you are paying is going towards the arrears.If you're making overpayments and the amount that you owe doesn't go down then it sounds like the overpayments aren't being applied. Talk to your bank and make sure they're not holding them in a reserve account but are actually applying them to the amount owed.
Sorry, but bear with me, I'm getting really confused and worried now.
I am two years and one month into the mortgage. If I look at my online banking daily, interest gets added daily at roughly £6.
I am definitely making the minimum payments, they come out by direct debit each month and there has never been a missed one.
When I do make an OP, it shows coming off the total on my online banking, but if I make an OP of £20 for example, after 4 days the interest will be £24 so it looks higher than before I paid the £20.
When I look at the mortgage statement online, it shows me the basic monthly and then how much I've overpaid, so it is definitely being added :S
But when I started on this website I owed ~57,200 and now it's ~57,300...0 -
Sorry, but bear with me, I'm getting really confused and worried now.
I am two years and one month into the mortgage. If I look at my online banking daily, interest gets added daily at roughly £6.
I am definitely making the minimum payments, they come out by direct debit each month and there has never been a missed one.
When I do make an OP, it shows coming off the total on my online banking, but if I make an OP of £20 for example, after 4 days the interest will be £24 so it looks higher than before I paid the £20.
When I look at the mortgage statement online, it shows me the basic monthly and then how much I've overpaid, so it is definitely being added :S
But when I started on this website I owed ~57,200 and now it's ~57,300...
The interest gets added every day, unless your OP is greater than the monthly interest it will always creep up, to stop this happening you need to OP about 180 a month.
That's not to say making £20 payments isn't worth it, eg if you owe 50,000 then pay £50 off, the interest will be on 49,950 rather than 50,000 however the interest will take you back over the 50k but not as far, so every payment ratchets it down.Start Date 16/09/2015
Original amount outstanding = 225,000 Current amount outstanding =199,812
Original LTV = 64% Current LTV = 49%
Original Pay Off Date = Sep' 36 New Pay Off date = Sep' 36
Original Dly Int = 17.17 New Dly Int = 17.17 Total OP = £1319.310 -
It's frustrating, but what you have to think is, what it would be, had you not made the OPs.Start Date 16/09/2015
Original amount outstanding = 225,000 Current amount outstanding =199,812
Original LTV = 64% Current LTV = 49%
Original Pay Off Date = Sep' 36 New Pay Off date = Sep' 36
Original Dly Int = 17.17 New Dly Int = 17.17 Total OP = £1319.310
This discussion has been closed.
Confirm your email address to Create Threads and Reply
Categories
- All Categories
- 350.8K Banking & Borrowing
- 253.1K Reduce Debt & Boost Income
- 453.5K Spending & Discounts
- 243.8K Work, Benefits & Business
- 598.7K Mortgages, Homes & Bills
- 176.8K Life & Family
- 257.1K Travel & Transport
- 1.5M Hobbies & Leisure
- 16.1K Discuss & Feedback
- 37.6K Read-Only Boards