best way to clear mortgage?

We have a standard mortgage for £25000 with the alliance & leicester. around 4 years ago we changed it to a 50/50 one as we had a letter warning our endowment may not cover the full cost.

We had advice that even if the endowment gave it's worst forecast, the 50/50 option would still cover the mortgage cost.

We now have around 2.5yrs left until the mortgage is finished, and was wondering what we could do to make it finish sooner? around 2 years ago i did phone the a&l to ask them about over payments, but they said that I was restricted in how much i could pay off and could only do it at certain times of the year? They also said it wouldn't reduce the time by very much at all.

Any suggestions welcome.



  • ring lender find out how much you can overpay every month, if you can afford more comfortably change term of mortgage (shorten term).

    Check with lender they do not charge to change term.

    for example 25 year mortgage will cost 500 a month

    change term to 10 years and new mortgage payment could be 900 a month

    by reducing term you increase your payments. Then you can overpay on top.

    Lender should be able to work out all the figures for you.
    Mortgage Start jun 2007 £88500 Outstanding Balance £51000
    Overpayments 2007 Nil 2008 £1040 2009 £7853 2010 £10000 2011 aiming for £18000 (6k so far)
    The Early Bird Gets the Worm, but the Second Mouse Gets the Cheese!!
  • StuartGMCStuartGMC Forumite
    2.2K Posts
    Are you still dependent upon the endowment even at worse predicted performance to clear the mortgage? If so then I assume this is why the term can't be reduced a lot (unless you can find the cash to clear it alone then wait on endowment to mature?). With such a low amount outstanding be cautious about changes which incur charges which may make a big difference in the final benefit you get from reducing it with just 2.5yrs left?
  • utukkuutukku Forumite
    2 Posts
    Hi, yes we will still need the endowment to pay off the mortgage, it may seem a small mortgage compared to these days, but at the time it was the highest we could go!

    I was thinking the same, that as it was such a short time to go that charges would be disproportionate to the savings. I'll give the A&L a ring and see what they have to say about extra payments.


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