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Lowest overpayment
poorjim
Posts: 44 Forumite
Hi All
A silly question but I wondered how much overpayments really benefit and if there is an amount which just isn't worth it. e.g. if someone was paying £10 per month extra would this be worthwhile?
pj
A silly question but I wondered how much overpayments really benefit and if there is an amount which just isn't worth it. e.g. if someone was paying £10 per month extra would this be worthwhile?
pj
Cheers to all contributers to MSE Forum :beer:
Member of £2008 4 2008 nowt won
Mortgage when started: £146,000
Current mortgage (01/2008): £142,000 4k in 2 years should i be pleased
Mortgage free day: 27 years or so
Member of £2008 4 2008 nowt won
Mortgage when started: £146,000
Current mortgage (01/2008): £142,000 4k in 2 years should i be pleased
Mortgage free day: 27 years or so
0
Comments
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Stick it into an overpayment calculator and see if it's worth it .I think you may be surprisedSpace available for rent0
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Great question I was just wondering if its better to pay off a little each month or save up for a few months or more and pay a lump off....BOI Credit Card = Was £3500.00 Now £0.00
GE Capital Store Card= Was £1800.00 Now £0.00
GE Capital Store Card = Was 1300.00 Now £0.00
Credit Union Savings Now £200.00 :T0 -
It appears I would reduce the term by 0.5 years and save a little over £2000. So I can see that probably the odd overpayment would help.
My next question would be whether saving the over payment towards fees when changing between fixed rates would in the long run save money due to the better interest rate.Cheers to all contributers to MSE Forum :beer:
Member of £2008 4 2008 nowt won
Mortgage when started: £146,000
Current mortgage (01/2008): £142,000 4k in 2 years should i be pleased
Mortgage free day: 27 years or so0 -
No it wouldn't as you would be paying interest on what you owe so the more you owe, the more you pay.
If you are able to get a savings account that pays a higher interest rate than your mortgage then you should keep your money in here not pay it off the mortgage.
You should also fill your ISA before you start any of this!Debt: 16/04/2007:TOTAL DEBT [strike]£92727.75[/strike] £49395.47:eek: :eek: :eek: £43332.28 repaid 100.77% of £43000 target.MFiT T2: Debt [STRIKE]£52856.59[/STRIKE] £6316.14 £46540.45 repaid 101.17% of £46000 target.2013 Target: completely clear my [STRIKE]£6316.14[/STRIKE] £0 mortgage debt. £6316.14 100% repaid.0 -
Cheers to all contributers to MSE Forum :beer:
Member of £2008 4 2008 nowt won
Mortgage when started: £146,000
Current mortgage (01/2008): £142,000 4k in 2 years should i be pleased
Mortgage free day: 27 years or so0 -
Because you will never get back a lost years ISA allowance.
When you pay money into an ISA you pick one with a good rate and you don't pay any tax on the interest you earn.
Normally we say that if your mortgage rate was 5.29% then you would need to earn 5.29 / 0.8= 6.6125% to equal it after tax. If you are using an ISA then you look at the ISA figure and that's what you earn. So an ISA rate of 5.3 beats a mortgage rate of 5.29 and a savings rate of 6.6.
It is helpful to use the calculators as it is the thing with compound interest that gets me every time. I didn't open an ISA until Novemeber because I couldn't be sure that I would actually benefit more from that. I now see I can offset it against my next mortgage and when I have a balance of 0 I can gradually start transferring out my ISAs to the best buy providers thus earning more again!Debt: 16/04/2007:TOTAL DEBT [strike]£92727.75[/strike] £49395.47:eek: :eek: :eek: £43332.28 repaid 100.77% of £43000 target.MFiT T2: Debt [STRIKE]£52856.59[/STRIKE] £6316.14 £46540.45 repaid 101.17% of £46000 target.2013 Target: completely clear my [STRIKE]£6316.14[/STRIKE] £0 mortgage debt. £6316.14 100% repaid.0 -
Okey so paying £10 a month into an ISA is better than £10 in overpayments? (as long as the ISA interest is the same as the mortgage)Cheers to all contributers to MSE Forum :beer:
Member of £2008 4 2008 nowt won
Mortgage when started: £146,000
Current mortgage (01/2008): £142,000 4k in 2 years should i be pleased
Mortgage free day: 27 years or so0
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