Your browser isn't supported
It looks like you're using an old web browser. To get the most out of the site and to ensure guides display correctly, we suggest upgrading your browser now. Download the latest:

Welcome to the MSE Forums

We're home to a fantastic community of MoneySavers but anyone can post. Please exercise caution & report spam, illegal, offensive or libellous posts/messages: click "report" or email forumteam@.

Search
  • FIRST POST
    • DropD
    • By DropD 4th Dec 17, 9:28 PM
    • 10Posts
    • 9Thanks
    DropD
    Part & Part - Overpayments
    • #1
    • 4th Dec 17, 9:28 PM
    Part & Part - Overpayments 4th Dec 17 at 9:28 PM
    We have a 90k loan with two thirds on interest only and remainder on repayment. Our loan rate is 2% fixed for 5 years. Loan Term is 12 years.


    We are in position to overpay by around 300 - 400 per month and wondering if should apply this to the repayment or interest only part?


    Anyone any thoughts on best approach?


    Thanks
Page 1
    • Thrugelmir
    • By Thrugelmir 4th Dec 17, 10:07 PM
    • 58,492 Posts
    • 51,857 Thanks
    Thrugelmir
    • #2
    • 4th Dec 17, 10:07 PM
    • #2
    • 4th Dec 17, 10:07 PM
    Would suggest the interest only part. With only 12 years left on the mortgage term. You can target/monitor how much you've left to repay.
    Financial disasters happen when the last person who can remember what went wrong last time has left the building.
    • getmore4less
    • By getmore4less 4th Dec 17, 10:50 PM
    • 32,035 Posts
    • 19,223 Thanks
    getmore4less
    • #3
    • 4th Dec 17, 10:50 PM
    • #3
    • 4th Dec 17, 10:50 PM
    what's your goal.

    if you target the repayment, if you get short of money your future payment could be lower



    lets do some numbers(rates can change)


    We have a 90k loan with two thirds on interest only and remainder on repayment. Our loan rate is 2% fixed for 5 years. Loan Term is 12 years

    90k 12years 2% is 704pm

    current payments

    60k 2% 12y 469
    30k 2% 12y 50
    total 519

    you need 185pm extra to pay all of this off

    300-400 is plenty

    if we say 300pm(820total) for the next 5y starting now you will have 47,758 left and if you can get 2% for the next 7 year you need a payment of 610

    if you can make 400pm(920 total) for the 5y your payment for the next 7@ 2% goes down to 530.
    Last edited by getmore4less; 05-12-2017 at 6:12 AM.
    • DropD
    • By DropD 5th Dec 17, 7:05 PM
    • 10 Posts
    • 9 Thanks
    DropD
    • #4
    • 5th Dec 17, 7:05 PM
    • #4
    • 5th Dec 17, 7:05 PM
    Thanks for replies. The main aim is just to clear the mortgage by the end of the current agreement.


    Hadn't considered how targeting the repayment could make things easier in future if money becomes short, thanks for taking time to explain.
Welcome to our new Forum!

Our aim is to save you money quickly and easily. We hope you like it!

Forum Team Contact us

Live Stats

2,184Posts Today

7,437Users online

Martin's Twitter
  • It's the start of mini MSE's half term. In order to be the best daddy possible, Im stopping work and going off line? https://t.co/kwjvtd75YU

  • RT @shellsince1982: @MartinSLewis thanx to your email I have just saved myself £222 by taking a SIM only deal for £7.50 a month and keeping?

  • Today's Friday twitter poll: An important question, building on yesterday's important discussions: Which is the best bit of the pizza...

  • Follow Martin