Overpaying my repayment mortgage

Gillybxxx

Hi there,

I had to remortgage ten years ago on my repayment mortgage. I have a total of £59,850 remaining at a 3.79% interest rate (paying £436 monthly), I have 15 years left to pay and I really don't want this to drag out so long, I basically have to work until I drop, is it worth overpaying each month? I've tried to use the online overpayment calculator but haven't been very successful, forgive me if I've missed the obvious, (not unusual in my case) but any advice would be greatly appreciated.

Many thanks
Gill

Savingdad

Yep overpay , my morgage is 50k now and I pay £750 a month and it will be paid off way sooner than the 15 years it has left.
Don't bother reducing the term of the morgage if they offer as this give you the flexibility to cut down your overpayments should something happen but your morgage will still end once you have paid it all back , it won't matter if the term is up or not.

sally0101

I watched Martin Lewis' programme on TV last night that I had recorded from earlier in the week. It was all about overpayments on your mortgageand how beneficial this can be, often saving you thousands of pounds.

See if you can get the episode on catch up as it explains it all. However, you do need to check if your mortgage company allows you to make overpayments as some dont and will charge penalty fees.

Joe_Bloggs

@Gillybxxx
Using the MSE Ultimate Mortgage Calculator , monthly overpayments of £116 in addition to your current payments will knock four years off the mortgage term.

There is a link in the calculator to the should I overpay my mortgage guide.

J_B.

northerner999

Gillybxxx wrote: »

Hi there,

I had to remortgage ten years ago on my repayment mortgage. I have a total of £59,850 remaining at a 3.79% interest rate (paying £436 monthly), I have 15 years left to pay and I really don't want this to drag out so long, I basically have to work until I drop, is it worth overpaying each month? I've tried to use the online overpayment calculator but haven't been very successful, forgive me if I've missed the obvious, (not unusual in my case) but any advice would be greatly appreciated.

Many thanks
Gill

If you have leeway in your budget, any extra payment will help and save on compound interest. A huge chunk of your monthly £436 payment is actually going to be covering interest.

The easiest way of doing this without feeling the effects too much is to speak to your lender and increase your monthly payment by a small amount. This depends on your circumstances, but £450 a month is probably a payment you can afford. That's an extra £168 off over a year. That would save you six quid and change on interest the next year, and 3.79 per cent on that then 3.79 per cent on that and so on.

That's just from an extra £14 a month. If you can afford £460, £470 or £500 then the impact will increase.

Just make sure you're not raiding money you need in saving, or not paying off things like credit cards which are on higher interest in full.

Thrugelmir

Gillybxxx wrote: »

is it worth overpaying each month?

Yes it is. However small the overpayment. Over time it will make a difference and save you money.

gazter

Gillybxxx wrote: »

Hi there,

I had to remortgage ten years ago on my repayment mortgage. I have a total of £59,850 remaining at a 3.79% interest rate (paying £436 monthly), I have 15 years left to pay and I really don't want this to drag out so long, I basically have to work until I drop, is it worth overpaying each month? I've tried to use the online overpayment calculator but haven't been very successful, forgive me if I've missed the obvious, (not unusual in my case) but any advice would be greatly appreciated.

Many thanks
Gill

Key is, to set the extra up as a standing order, so it just comes out every month like council tax, mortgage etc. You might be able to find a better rate as well, 3.79% isnt the best.