The Ultimate Mortgage Calculator discussion

bonerparte · 6 February 2011 at 5:55PM

I love this tool! I have emailed it on to stacks of my colleagues and they are shocked at the interest they can save!

I am trying an interesting idea at the moment but I would welcome any comments anyone has to offer...

My mortgage is with The Cheshire BS (now under Nationwide) and I started out with 147500 mortgage (25 years) at 5.99% fixed for 5 years. The repayments were originally £954.00 or thereabouts and I started it in mid 2008.

I recently extended my period to 35 years which dropped my repayments down to around £810 a month, but I am paying the saving off the capital along with some other funds. The rule with Cheshire is if I pay over £500 off at a time they give me a choice as to whether to reduce payments of reduce the period. I always go for the payments option. I am on Daily interest and it takes me around 2 months to save enough for the £500. When I pay this off they reduce my payments by around £4.00 or so a month. the saving I then add to the amount I pay off the capital and so these payments increase gradually.

I would welcome an option in the list on the calculator for 2 months, 3 months etc to make it more accurate. Because of the way I make my payments the monthly option doesn't cover it.

My question is this; if I continue as I have been and the O/P keep gradually increasing will I have saved more in interest than I would have by leaving the term as it was and not O/P? I had a discussion with someone at work and I considered I would be better off in the long run.

Comments anyone?

Thanks and best wishes

Dan

student100 · 14 July 2011 at 1:47PM

I've just been playing with the offset calculator.

Is it just me or is it missing a couple of important features?

One is that once the size of your savings = the size of your mortgage, you've effectively 100% offset, so any further savings can go in a savings account and start earning interest (you could use all your savings to pay off the morgage at this point if you wanted).

The second is that, rather than quote a monthly payment and an amount of regular savings, it would be best to say "total income each month that you will either spend on the mortgage or save". So say that amount is £600 and the mortgage payment is £350, I could afford to save another £250, but if the mortgage payment is £400 I'd only be able to save £200, etc.

Would also be good to take into account overpayments in the non-offset scenario. e.g. I might decide that instead of paying £350 mortgage and saving £250 I pay £450 mortgage (£100 overpayment) and save £150.

KateJackson_2 · 22 September 2011 at 4:38PM

A question -
I have a fixed rate mortgage for 4.75%. I am moving abroad for a bit, and have sold my business, so I could pay off my mortgage. I am renting my house out whilst I am away, and I can put the interest payments against my profits on the rental on my tax return. I will only be in the basic tax bracket whilst I am away.
I can't work out if I am going to be better off paying off the mortgage and not claiming any tax relief, or leaving it as is it, putting the money in high savers and claiming tax relief.
!!!
Kate

kingstreet · 22 September 2011 at 5:06PM

What happens to the mortgage rate if you ask your lender for consent to let? What's the penalty for paying off the fixed rate early?

Have you investigated the tax situation for a landlord residing overseas? I'm pretty sure the tax regime is different.

KateJackson_2 · 27 September 2011 at 8:13AM

Its a fixed rate and the mortgage company have agreed not to alter that after granting me consent to let.
Also, the mortgage is one that I can pay off all bar £1 without any penalty (chosen specifically as I get lump cash sums intermittantly and wanted to be able to pay that into the mortgage) Its Northern Rock.
I have to fill out a tax return same as before, and the rental and my savings income will push me into the 20% tax bracket. The rules are the same for the relevant things as far as I can tell from my research.
I just can't get my head around the sum that would get me to the figure of 'your savings need to earn you x% or else its cheaper to put the money against your mortgage' as somehow I have to account for being able to count the interest against tax.
I am sure there is a clever formulae somewhere...

TheWasher · 18 November 2011 at 11:31AM

I am considering an Offset Mortgage and I have just found this tool. I am however feeling a bit thick. What exactly does the Net Interest Cost mean? Should I be looking for low or high?
I currently have a £100000 repayment mortgage with 10 years left. The interest rate that I negotiated many years back is base rate + 0.79% = 1.29% fixed indefinitely. I am about to be made redundant and am wondering what the best thing to do is - pay off the mortgage, offset or remain where I am with interest on my savings to over pay.
The calculator tells me that I the Net Interest Cost is a negative sum if I continue with my current plan and gain interest on my savings. Is this a good thing? An offset mortgage however shows a much higher positive amount. Hopefully someone can help?

Many thanks,

getmore4less · 18 November 2011 at 1:04PM

last time I look this ultimate calculator it had loads of flaws and really does not tell you what you need to know. No idea if it has been fixed yet.

With a rate of 1.29% you would not offset anyway you would keep the savings in savings accounts paying more.

Unless your crent lender wil let you offset being redundant may give you issues remortgaging.

TheWasher · 18 November 2011 at 2:19PM

getmore4less wrote: »

last time I look this ultimate calculator it had loads of flaws and really does not tell you what you need to know. No idea if it has been fixed yet.

With a rate of 1.29% you would not offset anyway you would keep the savings in savings accounts paying more.

Unless your crent lender wil let you offset being redundant may give you issues remortgaging.

Many thanks for your response. I thought that it would be better for me to stick with the current rate of 1.29% and put the savings into a savings account but I wanted to see what the actual savings were likely to be so that I can talk my wife through this.
Regards the current lender, they don't offer offset mortgages so would have to look at changing provider and I really don't want to let go of the 1.29% rate to go to 3%+ just in the hope of saving a few £. Will stick to what I have and bank the savings into a high interest bearing account.

Once again many thanks.

KR

Rosso · 22 January 2012 at 6:45PM

Doesnt seem to be working at all at the moment, I put in the details, hit calculate and then form resets and no information is displayed.

elainewhi · 8 February 2012 at 2:48PM

Just used the Mortgage Free overpayment calculator and it is a great motivator when I see I can be mortgage-free in 6 years if I PLAN.

The Ultimate Mortgage Calculator discussion

Comments

Categories

Get our FREE Weekly email full of deals & guides - and it’s spam-free