How much to overpay on mortage - maths question!

Poppy3008

Hi, I am not great (rubbish) with maths and would appreciate some help if anyone can.


I owe £112,719.67 on a BTL mortgage at 3.89% (ish) - it's up for renewal on 30 April 2017 - if I continue paying what I am - £850(including already a small OP) - then the balance on that date will be £109,800.00.
I would like my total to be under £107,000 as my LTV would then be under 60% and thus improve my chances of a better rate. I am a Ltd Company with only 2 years of accounts so need to make this work!
So...how much do I need to over pay to get to this figure? I want to be as exact as possible as money is tight right now. If you can show me how to work this out too I would be extra grateful!!!


Thank you!!!

kingstreet

£109,800 - £107,000 = £2,800?

Poppy3008

kingstreet wrote: »

£109,800 - £107,000 = £2,800?

LOL - is it as simple as that?? oh dear - I am worse than I thought. Thanks!!!

kingstreet

Unless I'm missing something.

You say the balance will be £109,800 and you want it to be £107,000, so the difference is £2,800.

Dividing that by the number of months over which you want to spread the overpayments will tell you how much you have to pay each month, if you don't just want to make a one-off payment at the time.

Tantalus86

if your house will be worth £183000 or more on 30 April 2017 then you won't need to overpay anything extra.

getmore4less

I owe £112,719.67 on a BTL mortgage at 3.89% (ish) - it's up for renewal on 30 April 2017 - if I continue paying what I am - £850(including already a small OP) - then the balance on that date will be £109,800.00.
I would like my total to be under £107,000

here is how to do it.

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

put in the numbers interest only, press calculate->details.
look at the 6 month number.

£112,720 @ 3.89% paying £850pm for 6 months owe £109,788.74


change the payment till it goes under £107k at 6months

good first guess add £2700/6 £450pm

£1300 £107,066.76 still over add another £11 (66/6)
£1311 £107,000.23 close enough

might want to do a little more to make sure as the months are not really equal.

total cost extra £461*6 £2766 difference was 2789, save £23 by overpaying rather than a lump sum at the end

Poppy3008

Brilliant - thanks everyone!!

WaywardDriver

Poppy3008 wrote: »

Hi, I am not great (rubbish) with maths and would appreciate some help if anyone can.


I owe £112,719.67 on a BTL mortgage at 3.89% (ish) - it's up for renewal on 30 April 2017 - if I continue paying what I am - £850(including already a small OP) - then the balance on that date will be £109,800.00.

If you have Excel the formula =PMT(3.89%/12, 6, -112719.67, 107000, 1) gives £1306.75.
As a check =PMT(3.89%/12, 6, -112719.67, 109800, 1) gives £845.34 which is close to current £850.