Mortgage Interest

johmcd

i asked for a redemption figure from my Mortgage lender , i have 4.5 years left on my mortgage but the figure they gave me was the same as what my balance is ...my question is should i not be saving 4.5 years of interest  ? if not then i would be better just keeping my money in back and earning interest?

jrawle

The balance you refer to will be the balance today, so this should be the about same as the redemption figure. If you kept the mortgage for another 4.5 years, you would pay another 4.5 years' worth of interest on top of that.

Whether it's worth putting money in a savings account depends on the interest rate you can find, compared to your mortgage rate. If the savings rate is higher, you would be slightly better off continuing to pay the mortgage.

la531983

The OP needs to realise interest on a mortgage is calculated daily, it isn't front loaded onto the mortgage.

The above advice still applies though if you can put it all into savings at a better rate. 

johmcd

thanks for the quick response 

MWT

johmcd said:

thanks for the quick response 

If you want to visualize the saving, multiply your current monthly payment x the number of months remaining (54?)

Compare that to the settlement figure...