how do i do it

david69_2

I want to pay off the mortgage early how much do i need to overpay each month ? and I've got an endownment that matures in 8 years which was meant to clear original advance.
amount outstanding £63700
endownment payout ? should of been £45k to cover original mortgage but its on target for a shortfall (not sure how much yet)
mortgage is on a 5.84% discount mortgage for the rest of the term
£35000 is interest only
£28700 is repayment
I currently pay £550 a month for the mortgage and £57.57 for the endownment (standard life) I want to pay it off in 5 years if possible but how can i do it if the endownment has 8 years to run?

JonnyBravo

david69 wrote: »

I want to pay off the mortgage early how much do i need to overpay each month ? and I've got an endownment that matures in 8 years which was meant to clear original advance.
amount outstanding £63700
endownment payout ? should of been £45k to cover original mortgage but its on target for a shortfall (not sure how much yet)
mortgage is on a 5.84% discount mortgage for the rest of the term
£35000 is interest only
£28700 is repayment
I currently pay £550 a month for the mortgage and £57.57 for the endownment (standard life) I want to pay it off in 5 years if possible but how can i do it if the endownment has 8 years to run?

Ok to repay a mortgage of £63700 in 5 years at 5.84% is going to need a monthly payment of c. £1227, so thats a ballpark figure for you to start to think about.

However, you have an endowment working for you, but thats due to mature in 8 years not 5. There is of course always the possibility of cashing it in early to help you on the road to "mortgage freedom"... but when do do it?

To make a more accurate guess at best course I'd want to know how much you can overpay on your repayment mortgage without charges, how much you can afford to overpay over your current £550/month. Are the mortgages both 5.84? Do they have the same fees etc etc etc Lots really plus stuff like.... What the endowment is currently worth and its projected total.

But I'm gonna guess what to do anyhow.

Keep your mortgages as they are but overpay as much as you can afford towards the repayment mortage (assuming youre allowed to ie no charges). To repay a mortgage of 28700 in 3 years needs payments of c. £871/month at your current rate. Can you manage that? Let's assume so.

At the end of the three years change your interest only to repayment and start to pay that.... the moment your amount outstanding = your endowment youll have the option of cashing in and being mortgage free!:beer:

Whether this in any good or not I cant say as I dont have enough info but its a start!

david69_2

The endownment figures I dont have to hand but the yearly statement is due in the next month , I can afford to overpay about £200 a month I've also got a few standard life shares which i can cash inbut i was going to hang on to them.
The mortgage is all on the same rate 5.84% and i can make unlimited overpayments .

JonnyBravo

david69 wrote: »

The endownment figures I dont have to hand but the yearly statement is due in the next month , I can afford to overpay about £200 a month I've also got a few standard life shares which i can cash inbut i was going to hang on to them.
The mortgage is all on the same rate 5.84% and i can make unlimited overpayments .

Well you could either start overpaying your mortgage or if you dont have a cash ISA it would work out better to put your 200/month in one of those.... just pick one above 5.84%
As for your shares.... thats up to you.... I have no crystal ball to tell whether theyre going to go up down or all around.

At first glance it does look a stretch to do 5 years but keep in mind any overpayment / saving in an ISA is a good step to the future being MF

Capricorn_One

david69 wrote: »

I want to pay off the mortgage early how much do i need to overpay each month ? and I've got an endownment that matures in 8 years which was meant to clear original advance.
amount outstanding £63700
endownment payout ? should of been £45k to cover original mortgage but its on target for a shortfall (not sure how much yet)
mortgage is on a 5.84% discount mortgage for the rest of the term
£35000 is interest only
£28700 is repayment
I currently pay £550 a month for the mortgage and £57.57 for the endownment (standard life) I want to pay it off in 5 years if possible but how can i do it if the endownment has 8 years to run?

Wouldn't it be better to sell the endowment (NOT surrender it)? Then switch to an offset mortgage and offset the amount from the endowment.

The answer to your question about paying it off early is by doing a net search for "overpayment calculator".

david69_2

I had looked at switching to an offset are there any mortgage companies out there who dont charge for switching to an offset . The one account charge fees i think?

JonnyBravo

Capricorn_One wrote: »

Wouldn't it be better to sell the endowment (NOT surrender it)? Then switch to an offset mortgage and offset the amount from the endowment.

The answer to your question about paying it off early is by doing a net search for "overpayment calculator".

Thats a judgment call isnt it.... we dont know anything about the endowment, let alone any future performance it might have

david69_2

I will post some more info on endownment once the statement has come but i doubt i will be selling it .
Thanks for the replies so far.

david69_2

Would i be right in thinking that any overpayments i make will reduce the capital part of the mortgage if so what happens in say 5 years I've paid all the capital off and it will still leave me with say £35000 interest only left. do i then switch some off that to capital?