Can someone check my sums?

engineer_amy

Hi All


I'd appreciate someone casting an eye over my calculations just to make sure im not missing something obvious!


Currently in a fixed rate deal of 2.03% until 29th Feb 2020 against a mortgage of £72104. Im only allowed overpayments of £1000 per calendar year and I have already used this years allowance. There is an ERC of 3% on any additional payment.


Rather unexpectedly, I have a sum of £42k available which I would like to pay off the mortgage. My initial thought was to let the fixed deal run until expiry and pay off the £42k so I wouldn't have any ERC. But looking at the numbers, I should be better off overpaying now and paying the ERC, so that's what I want to ask - will I be better off or have I miscalculated?


Using the calculators on MSE -


2 years at 2.03% on balance of £72104, total payments = £8441


pay off £42k now, 2 years at 2.03% on £30104, payments = £3524 + ERC 3% of 42k (£1260) = £4784


a saving of £3657?

getmore4less

The max saving over 2 years is roughly £70k * 0.02% *2 = £2,800. Less the 3% ERC is £700.

With regular payments it will be lower.


Since you can get 2% in a 2y fixed rate you will be better off doing that.

That's for the full amount same applies to partial OP.