Over paying mortgage, think I am doing right thing

Collision

Hi, I have 16.4 years to pay off £58,424 at 2.5%, monthly repayments are £432. I have put my monthly payments to £1000 so I am overpaying £568. There is no penaltys for finishing mortgage early, I have worked it out that I would be finished it in 5.4 years is this right??

Dird

Do you not get a penalty for overpaying more than 10%?

HHarry

It doesn't look far off. Congratulations!

Collision

dird there is no penaltys.

Dird

Collision wrote: »

dird there is no penaltys.

Nice I just have to save then pay in bulk once the fixed period ends (other than the 10% limit)

Mobeer

Quick and simple check in Excel suggests 63 months at £991 month

getmore4less

Simple calculators do the job.

http://www.whatsthecost.com/mortgage.aspx
(set to interest only and stick in your payment)

£58424 @ 2.5% £1000pm month

63 months last payment £363.

£58424 @ 2.5% £1006pm month

62 months last payment £971.

Collision

@getmore4less is that right, was wanting to pay a chunk off mortgage 10k, should I reduce term or paynents or just pay 10k off? Whats the best to do?

PixelPound

Collision wrote: »

@getmore4less is that right, was wanting to pay a chunk off mortgage 10k, should I reduce term or paynents or just pay 10k off? Whats the best to do?

If you are right and there is no Early Redemption Clause or limits on overpayment, then pay off sooner to save interest i.e. a lump sum of £10K at the start is better than spreading it over the year IF you have the cash to hand.

Of course, to counter this, if you have the cash to hand you could be better saving it if you could get a higher rate. e.g. a 3% tax-free ISA than paying early.

Collision

There is no clause on paying early, so I have upped payment to £1000 so £432 nomal payment and over paying 568 was going to pay £10,000 off aswell. When is the best time to pay 10,000 off? Is there any point of reducing the term when paying lump sums off? Or just stick to what I am doing?

Thrugelmir

Collision wrote: »

I have worked it out that I would be finished it in 5.4 years is this right??

Only if interest rates remain low.

Odds are diminishing by the month.