Paying of outstanding motgage??

scholesy69

I posted this on a different forum, maybe this is a better place?

Hello,

We are currently coming upto the end of our first 2 year fixed deal on our mortgage. Our current mortgage is £120k and we have 23 years left.
We have some money that we can pay off (no fees from mortgage company), I was thinking £1k, hence reducing total to £119. Is this a better 'moneysaving' step or to try to reduce loan period to 22 or 21 years?
My sort of plan is to pay off an extra £1k a year or to reduce period by a year everytime it is up for renewel.
Opinions???
Scholesy69

leedslass

Hi scholsey,

I'm not sure which would be the cheaper approach, but i've found american mortgage amortization tables useful for playing around with figures to see what saves the most interest. This is the one I use: http://www.bankrate.com/brm/amortization-calculator.asp
Once you put in your borrowing amounts and interest rates, plus details of any extra payments it generates a table showing how much interest and repayment you pay every month for the full term.
Hope that helps.