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Mortgage Break / Overpayment
abeefeater
Posts: 6 Forumite
Hi,
I have an idea to pay more off of my mortgage balance by taking a payment holiday (stay with me). I am quite new into a mortgage and therefore I can afford to overpay my mortgage (10%) without penalty.
Lets say for instance my mortgage was £1000 a month (interest and repayment). If I took the 3 month break and paid my usual £1000 a month as an over payment would this deduct form my balance and save on interest?
Am I missing some simple maths here or would this put my in a better position of reducing my mortgage term in the long run.
I have an idea to pay more off of my mortgage balance by taking a payment holiday (stay with me). I am quite new into a mortgage and therefore I can afford to overpay my mortgage (10%) without penalty.
Lets say for instance my mortgage was £1000 a month (interest and repayment). If I took the 3 month break and paid my usual £1000 a month as an over payment would this deduct form my balance and save on interest?
Am I missing some simple maths here or would this put my in a better position of reducing my mortgage term in the long run.
0
Comments
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It depends on the nature of your mortgage holiday, however the interest still accrues on many mortgages (like my two) if you were to take the holiday. That means that if you take a mortgage holiday, then your mortgage balance will actually go up. However, you need to check the terms of your mortgage because they can vary.Mortgage started at £318,000 in June 2016. Original MF - 2041 :eek:
2nd Property Mortgage at £275,000. Mortgage free: 2049 :eek:
Total OPs: £295290 -
Again keeping simple maths.
If a regular payment of £1000 was split as £400 capital £600 interest..
Surely the £1000 would just be capital And be beneficial ?0 -
The interest so 600 x 3 would generally be added to your mortgageMortgage Aug 2019 161,000 :eek::eek::eek:Nov 2019 156,500:T Jan 2020 153,122:T, Apr 2020 149,500, Apr2021 139, 675, Oct 2021 136,823, Dec 2021 136,120🙂EF 0/12,000 (0%)😕 (5062.44 was ERC), Jan 2023 128,650. Our Mortgage is never going to be as high as it is today. :jOnwards and downwards to a better life for our family. :jJust keep swimming0
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