Mortgage question - anyone offer me some advice please?

olivia*from*bolivia

Hello all. Anyone knowledgeable out there with some advice please I would be v. grateful. We have a part interest only, part repayment mortgage, taken out to give us a bit of breathing space in the first few years of the term. We are now paying the amount which would be the same as full repayment as calculated by the mortgage company. As we are six years into a 25 year term, and our fixed term as 5 years we are now in the very fortunate position to be paying a 1.75% over the BOE base rate for the life of the mortgage. I realise if the base rate goes up then our mortgage goes up.. The mortgage was done through a financial adviser, for one reason and another, I don't want to go back to them to ask this question. We are currently paying the 'extra' mortgage (to take the figure up to the repayment figure based on the 5 year term) as a separate direct debit. This goes into the pot for 'interest only' currently. Does it matter which I pay off first? the Interest only bit or the repayment bit? Or will it all work out the same in the end assuming we do this for the life of the term. Don't want to be making a costly mistake. The mortgage company won't obviously give advice. thank you.

getmore4less

Should make no difference as long as the TOTAL payments are what is needed.

check the regular payment is not creeping down needing the overpayment to creep up.


stick the number into a simple calculator.
http://www.whatsthecost.com/mortgage.aspx

19year term, amount outstanding, 2.25%, repayment -> claculate

make sure the total payment is at least that big.

to see the payment to knock a year off the term change the term to 18, repeat ill they are more than you can afford.

olivia*from*bolivia

thank you for your response, will do this. As far as I know if I only paid the part i/o/part repayment figure based on today's base rate, the mortgage would drop right down to £400 or so, so we are paying well in excess.

Rafter

Agree with the above. Shouldn't make any difference.

You should be able to 'beat' at 2.25% savings rate with ISAs though - so make sure you take out a full cash ISA each every year as well - but move it or repay some of the mortgage if the rate falls below 2.25%

Other than that, just keep 'snowballing' paying off as much as you can reasonably afford if you want to be 'mortgage free' in less than 19 years. It is amazing what repaying more in the earlier years can do to your loan term and total amount payable.

Good luck

R.

olivia*from*bolivia

thank you both so much ..