Help please! Mortgage redemption

Hillysmrs

Firstly sorry for long post!! Due to illness im trying to get my affairs in order.
I have a mortgage that is capital and interest I pay £235 month and on my statement it shows that monthly im charged between £66-73 interest.

My current outstanding balance is £31000 and i have 11 years 4 months left. We originally borrowed 48000

Im looking to sell my house can someone please advise the process:
Will i have to pay the £31000 plus fees or is it £31000 less ie 11 years 4 months less of the £66-73 interest so about £8700 odd deducted from the £31000?

I hope i make sense sorry :j

Thrugelmir

The balance owed is the amount you'll need to repay, i.e. £31k.

Hillysmrs

Thank you for your reply, i just dont understand how it wouod still be £31000 if im paying it off 11 years and 4 months early?

pinklady21

How much did you borrow to start with? It must have been higher than £31k? So you pay interest on the amount you borrowed, and each month pay a bit of the capital back so over the period of the loan, your outstanding balance gradually reduces.
You don't pay the interest "in advance", it covers the cost of borrowing whatever the outstanding amount it.

As it is a capital and interest or repayment mortgage, then each month you are paying back a bit of the capital, but you are also paying off some interest on the balance that you owe. The interest each month is to cover the cost of borrowing whatever amount is outstanding.

I hope that makes sense!

Hillysmrs

Im in a mess as i have a charge on the property for £25000 also and would be lucky if i got £50000 for the sale of the house i wouldnt be able to clear what I owe I just dont know what way to turn

pinklady21

Possibly get some debt advice?
Try Citizens Advice Bureau (CAB) or National Debtline https://www.nationaldebtline.org/
Best of luck.

ACG

The balance today is £31,000.
The balance after your next payment will be £31,000 - £235 +£66-73.

The interest has not been charged yet and it would never become chargeable if the Mortgage is cleared before it becomes due.

ACG

ACG wrote: »

The interest has not been charged yet and it would never become chargeable if the Mortgage is cleared before it becomes due.

Just to expand on this, the interest has been charged on the money you have owed from when you took it out until now, but it has not been charged on the next 11 years.

kingstreet

Mortgages don't work like personal loans where the interest is front-loaded.

You slowly repay what you owe and interest next month is based on this month's balance.

You have a second charge over the property and the creditor will get what's left after the first charge is repaid.