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Planning to pay off mortgage in 4 years
todayisagreatday
Posts: 264 Forumite
In February this year we moved to First Direct after our previous fix was up. We are on a 5 year fix, £199,000 at 3.08% with an overall term of 12 years.
We want to try and make sure that when our fix is up in 2028 that we have the money to pay our mortgage off. What I'm struggling to find is what sort of figure we will have remaining at the end of the fix to pay off which would be helpful to know so we can try and work out how to schedule our savings accordingly. I had in my head it would be about £99k remaining but I don't know where I got this figure from!
Although First Direct offer unlimited overpayments given the savings rate is far more than our mortgage rate I'm guessing it will be better to save rather than pay money off it as and when we have it.
After tax our monthly income is around £7500 although can be a couple of hundred pound more if we have worked overtime. Our current mortgage a month is around £1700.
We want to try and make sure that when our fix is up in 2028 that we have the money to pay our mortgage off. What I'm struggling to find is what sort of figure we will have remaining at the end of the fix to pay off which would be helpful to know so we can try and work out how to schedule our savings accordingly. I had in my head it would be about £99k remaining but I don't know where I got this figure from!
Although First Direct offer unlimited overpayments given the savings rate is far more than our mortgage rate I'm guessing it will be better to save rather than pay money off it as and when we have it.
After tax our monthly income is around £7500 although can be a couple of hundred pound more if we have worked overtime. Our current mortgage a month is around £1700.
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Comments
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Well, you want to pay off £200,000 and the interest is no more than £30,000 max over the 5 years. You are paying £102,000 in standard payments over 60 months so you will need another £128,000 put aside or £2,130 a month.
You can mess around with the maths for accuracy but that is the basis of it.
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You should note that this site doesn't check my status as a Mortgage Broker, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice.1 -
amnblog said:Well, you want to pay off £200,000 and the interest is no more than £30,000 max over the 5 years. You are paying £102,000 in standard payments over 60 months so you will need another £128,000 put aside or £2,130 a month.
You can mess around with the maths for accuracy but that is the basis of it.
Thanks that is really helpful. That should be doable fingers crossed....0 -
Don't forget that there would also be compounding on regular cash savings. So £2K per month for 54 months at 5% is just over £13K.1
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Why not use the calculator on this very website?Put in the figures, and it tells you the remaining debt at the end of each year.I just did it using your figures above, and you would owe £124,884 after five years.
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