How do I find out how overpaying would affect our mortg?

dora37

Hi,

Our A & L flexible mortgage accepts overpayments - A & L have told us that if we overpay by £500 a month then the overpayment would be calculated on a daily basis.

Is there a formula where we could work out how much our capital amount would decrease by, say over 12 months with these overpayments?

Jazzking

Hi Dora,

Egg have a useful calculator for this type of thing:
http://new.egg.com/visitor/0,2388,3_54988--View_1028,00.html should work, otherwise you can navigate to it directly from the Egg homepage. Just put the £500 in the "monthly overpayment" box and the graph and the figures will show you how much you'll save!

Not sure about a formula though, sorry!

HtH,
Alex

SPembo

If you have Excel (2k3), there is a loan amortization template which you can play about to give you approx figures on monthly basis.

dora37

Jazzking wrote:

Hi Dora,

Egg have a useful calculator for this type of thing:
http://new.egg.com/visitor/0,2388,3_54988--View_1028,00.html should work, otherwise you can navigate to it directly from the Egg homepage. Just put the £500 in the "monthly overpayment" box and the graph and the figures will show you how much you'll save!

Not sure about a formula though, sorry!

HtH,
Alex

Thanks that was great - really useful and what an eye opener to what a difference overpayments make!

MarkyMarkD

dora37 wrote:

Hi,

Our A & L flexible mortgage accepts overpayments - A & L have told us that if we overpay by £500 a month then the overpayment would be calculated on a daily basis.

Is there a formula where we could work out how much our capital amount would decrease by, say over 12 months with these overpayments?

If it's a flexible mortgage and you overpay on the last day of the month, it would be recalculated straight away in any case, irrespective of the amount.

robnye

make sure that your mortgage interest is definately recalculated daily..........otherwise your interest payments wont change until the annual recalculation.....

dora37

robnye wrote:

make sure that your mortgage interest is definately recalculated daily..........otherwise your interest payments wont change until the annual recalculation.....

I have already spoken to A & L. Our interest is calculated monthly,however if the overpayment is £500 then it will calculated daily.

robnye

does your paperwork reflect this....... might be worth checking it
as i know A&L and possibly others have said one thing, but there computer systems are set to do another.....
my mortgage is currently with nationwide and i know they calculate the interest daily, as they whereon eof the UK first's to do so and made a big song n dance about at the time.

Joe_Bloggs

I could not find any online documentation that backed up the 'fully flexible' claim made by Allience and Leicester. Does anybody have a link ? The only thing I saw was an option to overpay upto 10% in January. The A&L home page reminds me of a one armed bandit fruit machine.
J_B.(This was not meant to offend bandits with a disability)

Dunkwho

please make sure you check for any overpayment fees on your mort ... you've not mentioned them in your posts so far. Current A&L morts have an overpayment fee unless you overpay in january (1 opportunity\year) ... thats halted me in my tracks for remortgaging - might not be a historic thing with A&L so worth checking ...