Overpayment

Yates78

Hi

Current mortgage £133,400, interest rate 2.34 fixed. After looking at the mortgage overpayment calculator on this site and putting in a monthly over payment of £50 it appears that it would make a useful difference after 3-4 years of monthly over payments of £50 to the amount paid off..

A) how accurate is this tool
Would a minimum of £50 per month be worth while doing

Thanks

Thrugelmir

Any overpayment is worthwhile. As the sooner the mortgage is repaid then one of life's biggest worries dealt with. Takes time for overpayments to have any meaningful impact. With higher interest rates on the horizon. Making hay while the sun shines is what its all about.

dimbo61

8 years ago we had a £120,000 mortgage at 4.74%
Have overpaid and offset very single spare penny and now under £10,000
It can be done by hard work, using MSE for everything you spend money on and simple living.

Dave882

I don't think you can beat making any sort of overpayment. As soon as we change our mortgage I increase the monthly payments. It's very satisfying watching your mortgage debt decrease quicker than expected.

getmore4less

Yates78 wrote: »

Hi

Current mortgage £133,400, interest rate 2.34 fixed. After looking at the mortgage overpayment calculator on this site and putting in a monthly over payment of £50 it appears that it would make a useful difference after 3-4 years of monthly over payments of £50 to the amount paid off..

A) how accurate is this tool
Would a minimum of £50 per month be worth while doing

Thanks

any simple tool will get the answer you need.

http://www.whatsthecost.com/mortgage.aspx

on 2.34% over 3/4 years the £50 reduce the debt by £1800/£2400 before the additional interest savings of £62/£114

dimbo61

2.34% is a great interest rate so I guess you might have this for 2 or maybe 3 years at most ?
If you have any other debts at a higher rate them clearing them first is more MSE !
£50 a month will help make a dent in a £133,000 debt but £500 would be better still.
Always wanted a BMW 3 series estate in blue with full leather, auto box, Sat nav and heated seats but that would cost £500 a month to lease.
So we have a 7 year old Citroen Picasso which we bought cash !
£500 a month overpayment means we will have mortgage paid off 12 years early and not when I turned 65
Will also pay lender less than £4,000 in Interest rather than the £80,000 we were going to pay !!
Makes you think I hope ?

MABLE

http://easycalculation.com/mortgage/amortization.php

This is the one I use and I find it is more accurate.

getmore4less

Most calculators are wrong because they don't do the same calculation that the mortgage company uses.

With many mortgages now daily interest the calculators assume equal months which is wrong.

MABLE

My interest rate is calculated daily and at the end of the month I check with the online statement the amount for that particular month and then look at my print out from easycalculation. At the moment my interest calculation is
lower than the building society. So based on that I am happy.

amnblog

Any such calculator is based on assumptions on overpayments and rates.

Therefore they are about as accurate as the weather forecast.

Borrow as little as you can and repay as much as you can.

Simple.

Mike4DebtFreeMoney

2.34%, would that be Nationwide? 10 deals from them, 1.94% to 3.09% yet they are all 3.5-3.6% APR, paid from income after tax. All money gravitates towards the bank, regardless of how they dress it up. I moved my cash ISA into the mortgage: there's a nice feeling from a savings balance but it didn't really make sense given the sucky savings rate.