working out interest..

obay

So..

Got a question for you, as when we finally move into my house so I want to poise a question for anyone that can help, I think i've done my maths right.

My mortgage is for £151,300.00 with an interest rate of 4.84% fixed for 24 months

Which works out to be the following in the brake down
£7322.92/year on interest
£610/month in interest alone
my monthly repayment is set at £803.44/month fixed for 24 months.

My question is if I pay £610.44/month in addition to my £803.44/month would the mortgage reduce more quickly? As I'd simply be putting enough money in to clear the interest per month.

So in effect i'd be paying £813/month in capital payment per month.

Do I have my math right or am I wrong?

Looking to pay off my mortgage quickly now I've got it!!

dimbo61

Yes of course!
If you are overpaying every month then you will pay off the mortgage quicker.
Check if you are only allowed to pay 10% EXTRA off

obay

dimbo61 wrote: »

Yes of course!
If you are overpaying every month then you will pay off the mortgage quicker.
Check if you are only allowed to pay 10% EXTRA off

On the KFI it doesn't mention anything about overpayment it's kensington; do you know which section it is iin? maybe i've completely missed it..

ACG

Kensington do not allow overpayments. They do I think but they charge, so its probably cheapr just putting the extra in a savings account and making an overpayment at the end of the 2 years.

getmore4less

Your interest calculation is wrong.

As you pay off capital the interest each month goes down.

obay

getmore4less wrote: »

Your interest calculation is wrong.

As you pay off capital the interest each month goes down.

So if I pay a separate £610/month what would this do for the mortgage? How much in theory in capital would I be paying off?

getmore4less

use a calculator that shows the monthly breakdown interest, capital paid, amount owing

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

set to interest only
set a payment
set term to 2y
press calculate then details

change the payment and get a new result.

joujou

Why are you so fixated on overpayment by exactly the same as you're paying in interest? There is no specific benefit to doing that. Just work out how much you can overpay with, and whether your mortgage lender will charge for it.