Been Investigating becoming MF 22 June 2013 at 6:57PM in Mortgage-free wannabe 4 replies 582 views

foxtrot_mike

I've been looking at making over payments

I been playing with the calculator and according to my mortgage i can make up to 10% as im in the initial years of a new mortgage

My mortgage is 88000
Paying £437.32 per month
3.44% interest
25 years

if i paid 10% extra regular according to the calculator by entering 10% into the monthly recurring boxes it says ill be free in 2 years time .... wrong, too good to be true.

So i entered the 10% into the box £43.732 it now says ill be done in 21 years 5 months which im not sure if there is much point in doing at this time, unless im looking at this in completely the wrong way.

That said, i enjoy saving money so is it better to put my long terms savings into my mortgage as an overpayment than a savings bond and then enjoy that when i want to move house.

originalmiscellany

Try here:

http://www.moneysavingexpert.com/mortgages/mortgage-overpayment-calculator#result

If you overpay a total of £500 - rather than £438 you will pay off your mortgage 4.7 years early and save approx 8.7k in interest. Surely that's a good thing!

originalmiscellany

PS Once you do all of your calculations and realize how things will free up long term, you[ll get the bug and you will get stuck in. You are fortunate in that the mortgage is relatively not huge in comparison to others on here, but overpaying now really will make your life a lot more enjoyable later on down the line.
Plus as a person who enjoys saving, you should find mortgage calculators which show how much less you are paying every month will be an incentive - every month it will drop a little

foxtrot_mike

I guess the interest saving is the great thing

originalmiscellany

Totally! Work out how much you pay per day (Won;t be difficult), then work out how overpaying after a year will reduce it... The key thing is to keep your payments the same as you are effectively paying more off every month. Fantastic!