Mortgage Calculator

me8238DJ

I’m a little confused so some clarity will be very helpful.

When I use the Mortgage Overpayment Calculator and I enter an extra regular monthly amount that I wish to pay, it calculates it giving me amount saved on interest and also years saved.

But my question is, as the amount of the mortgage owed goes down, will I still be able to pay the same extra payment amount?

If the banks only allow you 10% extra payment per year if I pay £500 extra (on a 60K mortgage) every month and I have 10 years left, will I still be able to pay the same £500 when I only owe 20k?

The overpayments are to decrease the term.

Many thanks in advance

la531983

No, you wont be able to. As soon as my mortgage goes under £54,000 - £60,000 I wont be able to pay an extra £500 a month off it (they work out the balance once a year for overpayment purposes, at least my lender does).

So any surplus will just be going into a saving account and then bulk paid off the mortgage when allowable.

Remember you should be putting it all in a savings account anyway if its a higher interest rate than the mortgage (accounting for savings tax if applicable)