Interest only mortgage

mickelaine1

Hi, I have an interest only mortgage of £125,000 and am 43 years old, can anybody tell me how to start a payment scheme to pay this off in 22 years and how much i would need to invest per month. Hope someone can help, can't sleep!!!!!:eek:

Ian_Griffiths_Halifax

What is your interest rate on your mortgage and have you checked your Mortgage Offer Letter to see if the mortgage permits overpayments.

We need to know your Interest Rate then should be able to give you a figure.

mickelaine1

Hi, mortgage rate is 5.39%

mickelaine1

After looking I see that it need spaying off in 18 years due to my wifes age. AAAAARGHHHHH.

Ian_Griffiths_Halifax

To pay the mortgage off over 18 years at 5.39%, you wuld need to be paying £905.33 per month.

Over 22 years the payments would be £809.39.

Check your offer letter and see if you can overpay, then pay what you can afford.

You won't necessarily HAVE to pay the mortgage off over 18 years. If you are going to be working for 22 years and can afford to repay over that term, but can't afford the 18 year term, then pay the £809.39.

Bare in mind that you are likely to get pay rises over the years and so you should be able to overpay by more in the future.

mickelaine1

Thanks Ian.
Can't afford those kind of payments yet but nice to have a figure as to what is needed.

Mick

Ian_Griffiths_Halifax

If you can't afford those payments but can afford something, if your mortgage will allow overpayments then do so.

If you have other, more expensive debts, such as Credit Cards, then forget overpaying on the mortgage for the time being and overpay on the cards. Then, when the cards are clear, put the payments into the mortgage.

Hope it helps.