Will I ever be mortgage free???

leeloo1

I try to pay off what I can on my 2 Nationwide mortgages, but when I check the interest it seems to be going up by around £50 per day.

Mortgage 1 - £108579 (was £124K 4 years ago) - now 4.69%

so far this month: credit - £700 debit - £251.59

Mortgage 2 - £125078 (was £131K Oct 2006) - 4.98%

so far this month: credit - £1120.76 (OP £300) debit - £308.03



Mortgage 2 ends in Oct 08, so I've been OP £100pm and putting in a bit extra when I can afford it, so when I have to remortgage it won't be too scary. But looking at this month (I wish I hadn't) then the amount they are charging me has already swallowed my OP, and its only 18 days into the month.

Is this right? Am ready to cry that my hard earned OPs have achieved nothing... at this rate I'll never pay it off, let alone pay it off early.

Kaz2904

Well, with your mortgage standing at approx £225k you will be paying lots of interest. Setmefree2 reckons around £800 a month for her interest.
My interest has JUST dropped below £300 per month and I now owe £65.5k (ish).
Don't worry too much because ANY overpayment you make now will save save A LOT of money- long term.
The best way of calculating it is to go to www.whatsthecost.com/snowballs.aspx and enter your details. Then you can see how many months you are saving over the term of the mortgage.

rainbowtrout

I'm no expert but I think the payments on the first few years on the mortgage largely pay off the interest rather than the capital, i.e. the payments you make in the earlier stages actually go towards the 20 years worth of interest they charge you on 200k of mortgage. Not sure if overpayments go towards capital or interest, but From that it sounds perfectly conceivable the interest payments sound astronomical now, but as you pay off the capital it should reduce over time.

Kaz2904

Any overpayments go to the capital unless your mortgage co ask you if you'd like to reduce your monthly payments. If they do, say no!
rainbowtrout is right in that you pay more interest than capital in the earlier part. If you overpay now it will have a larger effect than later overpayments.

leeloo1

Thanks for replying - I guess you're right, I shouldn't be surprised at the amount of interest on a big-ish mortgage, ah well, will keep plugging away at the overpayments whenever I can...