Virtuous Circle

Running_Horse

So, apologies if this is the millionth time this has been asked.

Remaining mortgage 65K soon to be 60K due to a windfall. 17 years remaining on mortgage, but windfall has also paid off all loans and credit cards, leaving up to 1K per month to overpay on mortgage.

Normally mortgage balance has reduced by about 3K per year, plus our 12K overpayments, means 17 years remaining could be reduced to 4 years until mortgage free.

But I'm guessing capital repayments increase in later years, and reducing the debt will have further impacts. So is there a way of calculating when we might be finished, without it getting horribly complicated?

Would our lender run the calculations for us?

JimmyTheWig

Have a look at
http://www.moneysavingexpert.com/mortgages/mortgage-overpayment-calculator

Paying it off in 4 years will mean interest of around £3600 (at 3%). This will obviously change depending on quite how quickly you pay it off but for you nearly all of your payment each month will be capital so it doesn't make much difference.
So 64,000 divided by the total monthly payment should give you the number of months it will take.

Running_Horse

Thanks. I had no idea that calculator was there. Both your calculation and the overpayment calculator are suggesting it will be around 3 years and ten months.

The £1,000 a month will be our "cushion", and can be skipped if something else arises. But the prospect of being mortgage free is certainly a huge incentive to keep living the simpler lifestyle we are used to.

pavlovs_dog

be aware that your mortgage product may place restrictions on how much you can overpay penalty free each year

Running_Horse

Thanks. I'm on a Nationwide BofE tracker currently paying 2.24%. Phoned them up the other day and I can do any lump sums or monthly overpayments without penalty after the first five years.

We were lucky to get the right mortgage at the right time. I suspect they don't make much money out of us, and we would struggle to get 2.24% in savings. So they will be as glad to see the back of us as we will be to leave.