Can someone help me work out how much interest I'm paying?

JonnyBravo

jules73 wrote: »

Would be better if you worked it out based on the interest over the 22 years rather than your currnet daily rate.

52p an hour:j

Well ok, if you just want a low number instead of an accurate figure work it our per minute?!
This "average" is misleading and could lead people to think there's no point in overpaying. If you overpay your "average" is going to go down.

ailuro2 wrote: »

That's why overpaying early in the mortgage has such an impact- there's more money left over to pay off the repayment section of the mortgage though the monthly payment remains the same - this in turn reduces the outstanding balance even quicker, allowing the mortgage to be paid off early.

Before someone jumps on me for mentioning overpaying- this IS the mortgage free wannabe board.:rolleyes:

Currently we are down to £65 a month in interest from £137 this time last year.:j

Good Luck with getting rid of even just a few pence a day from your interest bill.

Spot on and well done.

tomstickland

5.95% is gross rate, so take 1/12th of that per month.
126,000*5.95/100*1/12 = £625 per month
About £20 per day.
85p per hour
1.4p per minute.

hostertlady

you know what? i wish i had discovered this site sooner, i am more or less paid up on my mortgage but if i knew then what i know now i would have made more of an effort to pay it off sooner,

i am tooooo scared to ask one of you to calculate how much interest i have paid on my small mortgage over 25 years!!

JonnyBravo

no point upsetting yourself about something you cant change.... its in the past forget it.... instead, revel in the fact that you're more or less mortgage free!

hostertlady

jonny, yes you are right- no point worrying now.

pavlovs_dog

ailuro2 wrote: »

http://www.moneyforums.co.uk/mortgage_calculator.php

lets you see how much it will be every year-

That's why overpaying early in the mortgage has such an impact- there's more money left over to pay off the repayment section of the mortgage though the monthly payment remains the same - this in turn reduces the outstanding balance even quicker, allowing the mortgage to be paid off early.

that there website offers some real food for thought, cheers ailuro :beer:

if you dont mind me asking, how much have you been overpaying by to make such a dent in your mortgage, and how many years have you knocked off the term?

ailuro2

We started overpaying by £50 a month just a few years ago, then after a while we upped it to £100, then to £150 and it's now at £200 extra every month. After a while it's all just a part of the monthly outgoings.

Even though we didn't overpay for the first 5 years or so of our mortgage ( we moved here almost 10 years ago,but only started overpaying about 4 years ago, iirc) Our mortgage should be gone by 2010, if not 2009. 11 years after we moved / 14 years early.:j We've had three big holidays in that time, plus lots of others closer to home, so it's not like we scrimp or eat blue line beans for tea.:p

fwiw we earn around £45K top line between us, so overpaying can be done by folk on an average wage.

Know what makes the biggest difference to us, though? Giving up smoking- best move we ever made on the money saving front.;)

ailuro2

hostertlady wrote: »

I am too scared to ask one of you to calculate how much interest i have paid on my small mortgage over 25 years!!

Well, 25 years ago at a really rough guess, you probably paid around £20K for your home. If the interest rate you paid was only 6% over the years then you paid around £18000 in interest, so double what you paid for the house.:eek:

If you paid more than 6.5% interest, then it is more than double.

Of course you'd have had MIRAS (remember that- tax relief on mortgage payments?:rotfl:) and might have had an endowment , so it's not worth thinking about now,really.

You're mortgage free, and hopefully debt free, the rest of this site will help you save plenty money too- rebanding of council tax, bank charges refunded, getting cashback on home insurance (just got £80 on top of saving £65 via Quidco) so all is not lost...:D

Another way to look at it is if you'd put £200 a month in the bank every month on top of paying rent, then it would be worth around £150K now, but your house would not be your own and you'd still be paying rent, in all lieklihood at more than £200 per month.

pavlovs_dog

ailuro2 wrote: »

We started overpaying by £50 a month just a few years ago, then after a while we upped it to £100, then to £150 and it's now at £200 extra every month. After a while it's all just a part of the monthly outgoings.

Even though we didn't overpay for the first 5 years or so of our mortgage ( we moved here almost 10 years ago,but only started overpaying about 4 years ago, iirc) Our mortgage should be gone by 2010, if not 2009. 11 years after we moved / 14 years early.:j We've had three big holidays in that time, plus lots of others closer to home, so it's not like we scrimp or eat blue line beans for tea.:p

thank you, that makes very reassuring reading.

we are currently saving a deposit, and hope to be able to put down something between 20-30k when we are finally in a position to move (circa 18 months). we like the idea of getting a family home that needs work doing to it, so that we can add value as we bring it up to modern standards. we also want a larger home than we would need (3/4 bed rather than 1) so that we can grow into it. by the time we eventually buy we will have been together for around 6-7 years, and will be at the starting a family stage. it seems much more logical than buying a smaller house only to have to move again in a few years to accomodate the growing family.

my guestimated budget for 18 months time suggest that after all outgoings are paid and we've paid ourselves pocket money, we should have a few hundred left to play around with. obviously in the early months that will go on decorating, moderising, furnishing etc (alongside dedicated budget we have to start us off). once the house is in a decent state money can going towards rainy day saving and mortgage overpayments. its heartwarming to know that as little as £50 can make such a big difference. after all, it would be easy to budget that extra £50 in as a normal monthly outgoing, and just as easy to knock it on the head if things got tight.

ailuro2

We have always been able to get at the money, so it's like having a savings account that pays a decent rate of interest, however, the way things have worked out, we've never taken money out of the overpayment fund.:D

Pavlov's dog - you're doing everything right.:beer:
One other thing we do when we're saving for something bigger is to put away half the money left over after the bills have been paid at the start of the month into a savings account. We get paid weekly so the new wages provide living expenses and build up into next month's bill payments, and we don't notice the money we put away.;) Before we know it we have a hol to Canada paid for!:j

Hopefully,PD, your timing will be perfect and you'll be able to pick up a family home for a reasonable amount of money instead of the horrendous figures we have seen over the last few years. Our home cost us three times the average salary at the time. Semi detached, very nice area, 3 beds, dining room, big kitchen and decent garden.Next to a great school too.:D To see young families expected to pay 6 times an average wage for the same type of home now brings it home how much the market has exploded by. It has to come back to being more affordable, and I suspect now is the time it is happening.

The housing market where I live in Scotland is normally pretty stable, but already a load of houses are appearing as fixed price instead of offers over, a sure sign prices are on the way down.

Good Luck - I have to add not everything goes as it is planned. We would have been mortgage free a long time ago we were quite happy in our little flat until we saw a surprise double line on a pregnancy testing stick! Luckily because we'd been saving we had money to buy the bigger car, the decent deposit on a bigger house, and luckily it happened when the housing market here was pretty stable.