2018 Mortgage-Free Wannabes

Lisaloppylulabell

Hi
Massively late to this years party lol but am wanting to get the ball well and truly rolling for 2019! I have looked into our mortgage and we can only overpay 10% of the outstanding balance. That doesn't really help reduce the length of the mortgage by much at all (about 4 years). How do we get around this or is this the only option we have apart from paying up in full?

Sorry, probably a really basic question but I'm new to all this and gathering as much info as I can.

thanks x

cod3

May I join?


Only a small mortgage, but I never seem to have anything left at the end of the month to overpay. Have recently overhauled the budget so I hope to o/p the allowed 10% in a lump by the end of the year. That will be £2,200.

anna42hmr

Lisaloppylulabell wrote: »

Hi
Massively late to this years party lol but am wanting to get the ball well and truly rolling for 2019! I have looked into our mortgage and we can only overpay 10% of the outstanding balance. That doesn't really help reduce the length of the mortgage by much at all (about 4 years). How do we get around this or is this the only option we have apart from paying up in full?

Sorry, probably a really basic question but I'm new to all this and gathering as much info as I can.

thanks x

Check with your mortgage company, however for many the 10% is per year (as opposed to the lifetime of the mortgage). As such how much you can overpay by re-sets annually. Some from anniversary of the mortgage date, others (such as mine with TSB) is 10% of the mortgage balance as at 1 January each year, so that 10% allowances build up over time. As such i have been allowed to OP by 10% each year, regardless if i already over paid by 10% the prior year.

Furthermore, I assume you are currently on a fix, and as such if you think you can put aside more than 10% for that year, i would over pay by as much as i was allowed and then save the rest, and then pay it towards the mortgage when the fix ends (as many mortgages that are not in a fix allow higher over payments). There is therefore often nothing then stopping you re-fixing again after the additional payment is made at the end of the current fix.

Also don't forget, that whilst cutting the mortgage down time wise, may seem to only knock a few years off, you are also reducing a lot of interest that you would be paying too.

So for example on a £125,000 mortgage overpaying by just £50 a month on a 20 year term increase would cut 1 year and 9 months off but also saves £3995 in interest (better in my pocket than the banks).

Increase this to £100 a month would only knock 3 and 3 months off, but would also save £7275 in interest!

An OP of £200 a month on this example, knocks off 5 years and 7 months, but also saves £12,345 in interest.

If you put your figures in the OP calculator can see what the differences would be.

https://www.moneysavingexpert.com/mortgages/mortgage-overpayment-calculator#results

ajmoney

No 70 reporting an OP of £500 for October. Thanks for running the thread.

beanielou

£4 TODAY!
Every little helps!
No 144

Schoolworker

No 72 reporting in to say that I made an overpayment of £120 today.

Rachiedabbler70

Hello All
Not caught up on the last few posts yet, but just reporting October payment
#169: £1,202.70 for the month made up of capital payment and overpayments. Total year to date £13,236.48

Thanks Pawlala. Gonna catch up on posts now before I go to bed

Brambleberry

Hi all!

The spreadsheet is looking amazing, well done everyone :T so much interest saved!

#110 reporting in with a payment of £200 for October, hope to squeak another one in later this month.

Thanks to pawlala :beer:

Chutney86

#93 with an overpayment of £12.62 for October

Thanks

Saving_Glut

Hi. 186 reporting a £3,000 op to date this year.