Interest only mortgage

snowdolly

Hi, I wonder if anybody could help me out here please. I have been trying to work out my problem using the mortgage calculators but am having alot of problems understanding them:eek:

I have an interest only mortgage with dead on fifteen years left to run on it. I have no repayment plan in place and am thinking of overpaying instead to pay it off. Is this a good idea?

My mortgage is for £163,620 interest rate is 2.75% I pay £374.96 per month on the interest only payment. I am able to overpay the mortgage by £550 per month, on top of the £374.96. Could some kind person tell me how many years I would have the mortgage paid off by if I do this please. Also, if it is not too much trouble, could I also have how many years it would take me if I paid overpayments of £600 per month. I am totally useless with figures.

Many, many thanks.

Morgage_Confused

To pay it off in 15 years you need to be paying £1110 per month.
Assuming the rate stays at 2.75%!!

Thrugelmir

At your current interest rate over 15 years. You would need to repay £1,110 a month in total.

At £925 around 19 years.

Big assumption is interest rates. If rates were to average 5 % over term of remaining mortgage.

At £925 would take around 27 years.

Get repaying as soon as possible. For a few months cut back and give yourself a kick start.

dimbo61

Using " whatsthecost" you would need to pay £1110.36 each month to pay off in 15 years at 2.75%
Paying £550 extra each month would mean the mortgage would be paid off in about 19 years if the rate stayed at 2.75% ( very unlikely!!! )
Paying £600 extra would mean a term of 18 years.
pay off as much as you can afford as in a few years time you might have more spare cash to reduce the debt quicker

snowdolly

I am very worried now. I thought I was actually going to be able to pay it off in less than 15 years! I did say I was rubbish with figures! Thank you for all your replies.

dimbo61

The £550/600 a month is a good start and depending on your age you maybe able to extend the term if you still have a mortgage at the end of the normal term.
For now overpay every penny you can

jamiefly

Stick with the £550 monthly over payment you say is affordable, if your circumstances change and you can afford to put more aside then do so.

In fifteen years the remainder will be little more than an accounting error relative to the original sum borrowed which using the national minimum wage as a metric has been debased by 25% since you took out the loan and over 70% since it's introduction. If past performance is a guide to the next fifteen years it would reasonable to assume the ~£30,000 owing at the end of term will have a monetary value today of less than £20,000 which your bank is sure to refinance relative to the equity held in your home.

alternatively, you could use a pension lump sum or inheritance to clear the balance.