how to work out maximum of mortgage

Shaheen40

I am allowed to pay off 10% each year on my mortgage without penalties. Can someone tell me the formula on how to work out how much I need to pay each year and how long it would take to be mortgage free? I owe £106K

SuperSavingD

10% of £106,000 is £10,600 per year.

Shaheen40

Thank you, I get that first figure but obviously after you have paid that figure plus your monthly payments the figure is reduced each month, That is the bit I don't know how to work out. I would appreciate it if someone could help work that out for me

Snwps

I think you're best checking with your mortgage company. Mine is a % of the balance owing as at 1st January of that year.  So if on 1st Jan its 100k you can repay 10k, then on 1st Jan following year its 85k you can repay 8.5k etc etc

Sky_

Agreed, I'm allowed to overpay 10% of the original mortgage balance each year (with Nationwide) i.e. the annual allowance doesn't reduce until/unless I remortgage.  I'm sure there will be other variations with different companies, so it's definitely worth checking your mortgage documents or contacting the mortgage company for clarification.

Shaheen40

I have found out by asking the bank, they will send me a statement of presumed 10% overpayment each year that will show how many years it will take to be mortgage free. However I would like to know the formula of how to work out  for myself.