Grrrr!!!! Didn't have the desired effect!

owitemisermusa

Just want to rant/vent.....

Before commencing a new fixed rate repayment remortgage, I decided to over pay by about £880 hoping to have a substantial reduction in the new monthly payments when the mtg was up and running.

Just spoken to the lender and the new recalculated monthly payment gives a reduction of just £1.77/month!!! :eek:

I feel as if I've wasted money! Aaaaaaaaaarrrrrrrrrrrrrrrrgggggggggggggggghhhhhhhhhh!

Thanks for listening!

silvercar

but £1.77 a month for the next 20 years is £424.80.

owitemisermusa

silvercar wrote: »

but £1.77 a month for the next 20 years is £424.80.

I know but..... was hoping for more. I could have saved the money in a high interest account instead.

However, I realise that it's £424 that I won't be paying interest on so <probably> a good saving I guess.

It's all relative, I was hoping for instant benefit.

simcla

£880 now to save £424.80 over 20 years!!! doesn't sound too good to me.

Mathsguy

simcla wrote: »

£880 now to save £424.80 over 20 years!!! doesn't sound too good to me.

I imagine the interest rate on the new mortgage went up or the period is over 20 years or both?

Gorgeous_George

At 6%, reducing the mortgage by £880 will reduce payments £6.30 over 20 years. Unless there is an admin fee of about £630!

More likely rates have changed but I would ask for clarification OP. The sums do not add up.

GG

owitemisermusa

Gorgeous_George wrote: »

At 6%, reducing the mortgage by £880 will reduce payments £6.30 over 20 years. Unless there is an admin fee of about £630!

More likely rates have changed but I would ask for clarification OP. The sums do not add up.

GG

I know, but that's what the lady said

If I had asked before making the overpayment, I wouldn't have done it! Sure it has reduced my debt but seemingly to little or no effect. I dunno how much mortgage interest I've saved by doing so but hey... deed is done.

I guess I could call back later and ask for further clarification.

maninthestreet

£880 @ 6% p.a interest = £52.80 interest saved each year = £4.40 per month. That figure of £1.77 per month can't be right.

Gorgeous_George

maninthestreet wrote: »

£880 @ 6% p.a interest = £52.80 interest saved each year = £4.40 per month. That figure of £1.77 per month can't be right.

My figure of £6.30 assumes a repayment mortgage over 20 years. Either way, the revised payment needs some explanation.



GG

nelly_2

over paying is the correct way no matter how it sums up

stick with it mate

owitemisermusa

I just had another look.

I made the overpayment in tranches - 600, 200, 80.

The £600 was made before the mortgage offer was issued so outsatanding loan figure had already taken this into account.

The £280 was afterwards.

BUT, the difference between the balance on which the offer was based and the current balance is £1048.33.

Surely that should amount to more than a paltry reduction of 1.77/month?