Mortgage overpayments and new monthly payment

andrewsrus

Hi, we currently have £121k left to pay on our mortgage over 8.9 years and will be overpaying 10% (£12,889) this month.  We’re looking to do the same again in January and Virgin will give us the 10% figure in December.

Is there a way to calculate rough estimates of how much our revised monthly payments will be, and how much we will have left when we come to remortgage in November 2027 if we continue overpaying 10% each year up until then?

Our monthly payment is currently £1315 and after the overpayment this month will apparently go down to circa £1200.

Trying to work it out on Excel but not quite clever enough.....  Any help greatly appreciated thank you

Brie

does this help?

Mortgage Overpayment Calculator: Pay off your debt early?... (moneysavingexpert.com)

I might manage to work out what it would be in excel but would need the interest rate.

That said - if you are paying off 10% each year for 9 years there shouldn't be a huge amount left.  Especially if you can get them to NOT lower your monthly payments at some point.  

andrewsrus

Hi, thanks Brie.  I've been on there but it doesn't quite do what i need it too.  If we overpay 10% now based on Dec 2022 balance, the monthly payment will come down to around £1200, then we'll overpay 10% in January 2024 and they'll come down again.

I'm trying to get an indication of what the payments will be from January after overpaying, so i can try to budget for the 10% in subsequent years up until our fix runs out in November 2027.  We're hoping to put the difference between what the DD is each month and what we're currently paying now into a separate account to pay at the end of the fix.  We can't continue paying Virgin the current DD amount, as they explained that will be classed as a further overpayment and we will be penalised for it.  

Not sure if any of this is making sense...

andrewsrus

by the way Brie, we're paying 3.24% and are fixed in until November 2027

Brie

My best guess calculation is that in Dec you'll owe £105400(ish) so your next 10% would be £10540.

If you stuck to paying £1200 a month and continued with 10% extra each year then in Nov 27 you'd still owe about £27300.  And if you were able to continue on the same rate with the same plan you'd be clear around Aug 29.

If you continued to have declining payments each year obviously you'd owe more.  

So if the payments went down by £100 each year in Nov 27 you'd still owe something like £37870.  And if you continued with declining payments at the same rate you'd finish paying in Oct 32.

Sorry I can't provide workings and that it's so rough.  Happy to be corrected by someone who is smarter at this than me!

andrewsrus

Thank you so much Brie, you've been really helpful.  I'll work with your figures as a rough guide but sounds good :-)