Calculating mortgage overpayment amount

100eyes

Hi all! I'm trying to set up a mortgage overpayment, but a bit confused on how to calculate it.

I'm allowed to overpay by 10%, so trying to figure out how much £ I can add to my monthly payments, can anyone advise?

penners324

Your balance at the start of the year divide by 10 then divide by 12

jay1804

100eyes said:

Hi all! I'm trying to set up a mortgage overpayment, but a bit confused on how to calculate it.

I'm allowed to overpay by 10%, so trying to figure out how much £ I can add to my monthly payments, can anyone advise?

Calculate 10% of your regular monthly payment, for example

£1650 you can pay £165 extra a month
£899 you can pay £89.90 extra a month

TheMilkmansDad

starting point is 10% of what. Each lender has different criteria. Examples are 10% of the original mortgage value and 10% of the balance. You need to check yours's 1st either by calling or checking your paperwork.

If you call them, they'll also most likely answer your question.

100eyes

jay1804 said:

100eyes said:

Hi all! I'm trying to set up a mortgage overpayment, but a bit confused on how to calculate it.

I'm allowed to overpay by 10%, so trying to figure out how much £ I can add to my monthly payments, can anyone advise?

Calculate 10% of your regular monthly payment, for example

£1650 you can pay £165 extra a month
£899 you can pay £89.90 extra a month

Haha ok! thank you, I think i was overthinking this, that makes sense

TheMilkmansDad

100eyes said:

jay1804 said:

100eyes said:

Hi all! I'm trying to set up a mortgage overpayment, but a bit confused on how to calculate it.

I'm allowed to overpay by 10%, so trying to figure out how much £ I can add to my monthly payments, can anyone advise?

Calculate 10% of your regular monthly payment, for example

£1650 you can pay £165 extra a month
£899 you can pay £89.90 extra a month

Haha ok! thank you, I think i was overthinking this, that makes sense

depending on your mortgage it may not be that simple. If the agreement is 10% overpayment on your monthly payments then that is correct. But if it's 10% of the opening balance for example (Nationwide) - if your mortgage was £100,000 you can overpay £10,000 per year, either in a lump some or over the year.

100eyes

TheMilkmansDad said:

100eyes said:

jay1804 said:

100eyes said:

Hi all! I'm trying to set up a mortgage overpayment, but a bit confused on how to calculate it.

I'm allowed to overpay by 10%, so trying to figure out how much £ I can add to my monthly payments, can anyone advise?

Calculate 10% of your regular monthly payment, for example

£1650 you can pay £165 extra a month
£899 you can pay £89.90 extra a month

Haha ok! thank you, I think i was overthinking this, that makes sense

depending on your mortgage it may not be that simple. If the agreement is 10% overpayment on your monthly payments then that is correct. But if it's 10% of the opening balance for example (Nationwide) - if your mortgage was £100,000 you can overpay £10,000 per year, either in a lump some or over the year.

My offer states a reduction of 10% per annum

penners324

100eyes said:

jay1804 said:

100eyes said:

Hi all! I'm trying to set up a mortgage overpayment, but a bit confused on how to calculate it.

I'm allowed to overpay by 10%, so trying to figure out how much £ I can add to my monthly payments, can anyone advise?

Calculate 10% of your regular monthly payment, for example

£1650 you can pay £165 extra a month
£899 you can pay £89.90 extra a month

Haha ok! thank you, I think i was overthinking this, that makes sense

This is completely wrong though 

penners324

100eyes said:

TheMilkmansDad said:

100eyes said:

jay1804 said:

100eyes said:

Hi all! I'm trying to set up a mortgage overpayment, but a bit confused on how to calculate it.

I'm allowed to overpay by 10%, so trying to figure out how much £ I can add to my monthly payments, can anyone advise?

Calculate 10% of your regular monthly payment, for example

£1650 you can pay £165 extra a month
£899 you can pay £89.90 extra a month

Haha ok! thank you, I think i was overthinking this, that makes sense

depending on your mortgage it may not be that simple. If the agreement is 10% overpayment on your monthly payments then that is correct. But if it's 10% of the opening balance for example (Nationwide) - if your mortgage was £100,000 you can overpay £10,000 per year, either in a lump some or over the year.

My offer states a reduction of 10% per annum

So divide that balance by 10, to give the annual overpayment) and then by 12 (to give the monthly overpayment)

getmore4less

You have to be careful because some lenders will work out that  10%/12 as too much if the regular payment does not reduce as that starts to accumulate an overpayment as well..

Also if you are Barclays you can overpay a lot more than 10% 
(always a good idea to say which lender)