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Calculating overpayments without going over penalty clause

lubylu2000
lubylu2000 Posts: 8 Forumite
in Mortgages & endowments
I'm currently trying to work out if its worth overpaying the mortgage on my property (currently rented out). I can use the overpayment calculators but can only overpay a max of 10% per year without a penalty. I can't quite get my head around how to work out by how much I would be able to cut the mortgage term if I overpaid the max allowed each year. Does anyone know how to do this or can point me in the direction of a calculator that will take this into account?

Thanks :)
«1

Comments

  • Thrugelmir
    Thrugelmir Posts: 89,546 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Photogenic
    Do you have another mortgage on the property you live in?
  • okborednow
    okborednow Posts: 169 Forumite
    Hi Lubylu,

    When i've been doing these sort of calculations i use the calculator here, it's nice and straightforward :)

    http://www.creditmarket.co.uk/mortgage-overpayment-calculator/
  • bigadaj
    bigadaj Posts: 11,531 Forumite
    Ninth Anniversary 10,000 Posts Name Dropper
    It's not Normally worth overpaying. Or even paying off a rental property As the interest on your mortgage can be offset against rent before you pay any tax.
  • dimbo61
    dimbo61 Posts: 13,727 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Photogenic
    This would make little sense unless you want to lower the LTV? to get a better deal.
    As others have said you can offset the mortgage interest against your tax on the profit you make
  • lubylu2000
    lubylu2000 Posts: 8 Forumite
    Thanks all for the replies. I failed to mention that I'm not a UK tax payer - I am a non-resident landlord. Sorry, I'm really not up on finance at all :embarasse

    Thanks anyway.
  • dimbo61
    dimbo61 Posts: 13,727 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Photogenic
    If the property is in the UK you should be a UK tax payer !!
  • Yorkie1
    Yorkie1 Posts: 12,570 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Combo Breaker
    dimbo61 wrote: »
    If the property is in the UK you should be a UK tax payer !!

    Unless registered with HMRC as a non-resident LL, of course.
  • dimbo61
    dimbo61 Posts: 13,727 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Photogenic
    Sorry, I'm really not up on finance at all
    Smile face and all ?
  • lubylu2000
    lubylu2000 Posts: 8 Forumite
    Sorry Dimbo don't really understand what you're getting at but Yorkie is right, I'm a non-resident landlord with no other earnings in the UK.
  • saverbuyer
    saverbuyer Posts: 2,556 Forumite
    edited 30 May 2013 at 7:36AM
    lubylu2000 wrote: »
    Sorry Dimbo don't really understand what you're getting at but Yorkie is right, I'm a non-resident landlord with no other earnings in the UK.


    Then your tenants should normally be deducting basic rate tax on your behalf.
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