Paying off 30k from our mortgage

lou47lee

Hi, we have been left some money from my nana when she passed away and want to pay 30k off our mortgage.

Our mortgage is £134,000 which we have 21 years left on, it is currently not fixed as we have just come out of our fixed term a few months ago. We pay £741 a month

My question is what will paying that amount off do? Never done this before so don't know anything, we want to keep our payments the same as would like to reduce years.

Any help/advice gratefully received x

MonsieurFrugal

Hi your monthly repayments will reduce with any big over payment, just request that your mortgage term is lowered that way you can keep your repayments higher.

dotdash79

The best thing to do is keep the term the same pay the lower amount and then over pay every month to the old level.

If you have just come out of a deal then it might be worth looking at what's available in the market, this is when a decent mortgage advisor can come into there own, they might be able to advise on how to lower payments/term and still keep access to the money if needed (Offset accounts).

Paully232000

If you wanted to fix again that would give you a good LTV for a new fixed rate assuming your house is worth more than 134,000 as you have paid off a few years of it.

Even if your house is worth 134,000, 30,000 is a good chunk for a 'deposit'.

dimbo61

You need to sit down with your OH and look at your goals in life!
Job, job security, income, retirement plans, age when you will have paid off the mortgage etc!
Now I agree with you that keeping the mortgage payment the same every month is a good idea to clear the mortgage early ( and I bet Nana would agree) BUT there is more than one way to skin a cat ( so to speak)
I love offset mortgages and have had one for 8/9 years.
If you and your OH are good with money and savings you could look at available remortgage deals taking into account ALL the costs and look at a long term fixed offset or tracker deal now you have a GOOD LTV.
You could either pay the lump sum straight off the mortgage or keep in an offset account saving you interest on your Offset mortgage.
Your call.

gazter

lou47lee wrote: »

Hi, we have been left some money from my nana when she passed away and want to pay 30k off our mortgage.

Our mortgage is £134,000 which we have 21 years left on, it is currently not fixed as we have just come out of our fixed term a few months ago. We pay £741 a month

My question is what will paying that amount off do? Never done this before so don't know anything, we want to keep our payments the same as would like to reduce years.

Any help/advice gratefully received x

This tool is extremely useful:
http://www.moneysavingexpert.com/mortgages/mortgage-overpayment-calculator

It says you would take 8 1/2 years off your mortgage saving £45,000 in interest alone.

lou47lee

Thankyou everyone, we have a lot to think about x

lou47lee

gazter wrote: »

This tool is extremely useful:
http://www.moneysavingexpert.com/mortgages/mortgage-overpayment-calculator

It says you would take 8 1/2 years off your mortgage saving £45,000 in interest alone.

That is very helpful as a rough guide, thankyou x