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  • FIRST POST
    • Kymmy1605
    • By Kymmy1605 12th Jul 18, 11:24 AM
    • 1Posts
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    Kymmy1605
    Mortgage payments
    • #1
    • 12th Jul 18, 11:24 AM
    Mortgage payments 12th Jul 18 at 11:24 AM
    Hi I'm currently sorting a mortgage and would like to know what's wats best way to pay it off quicker ? Ie extra monthly payments or a lump-sum at a time ?or is it same either way .also I'm getting a 5 yr fixed mortgage,and would like to know if after that when I remortgage ,will the monthly payments go down or not ?? New to all this
    Tia
Page 1
    • Farway
    • By Farway 12th Jul 18, 11:31 AM
    • 6,483 Posts
    • 10,745 Thanks
    Farway
    • #2
    • 12th Jul 18, 11:31 AM
    • #2
    • 12th Jul 18, 11:31 AM
    The rules may have changed, but when I was paying off early I found the interest was calculated annually, so it was better to pay in lump sum to reduce the "new" capital amount prior to "new" interest calculations


    Can't help with second question, sorry
    • campbell19925
    • By campbell19925 12th Jul 18, 11:33 AM
    • 146 Posts
    • 181 Thanks
    campbell19925
    • #3
    • 12th Jul 18, 11:33 AM
    • #3
    • 12th Jul 18, 11:33 AM
    Instead of paying off extra monthly it might be better to save what you would contribute monthly and benefit off the interest it would accrue in a fixed % savings account. Then pay it off as a lump sum.
    • RosyRed
    • By RosyRed 12th Jul 18, 11:35 AM
    • 1,814 Posts
    • 22,045 Thanks
    RosyRed
    • #4
    • 12th Jul 18, 11:35 AM
    • #4
    • 12th Jul 18, 11:35 AM
    You may be better reposting your question on the Mortgage & endowment board.If you click forum at the top, a list of all other forums comes up and you'll find it there,hope that helps.Good luck with it.
    'A woman is like a teabag: You never know her strength until you drop her in hot water'. (Eleanor Roosevelt)
    • csarina2
    • By csarina2 12th Jul 18, 11:39 AM
    • 2,238 Posts
    • 22,841 Thanks
    csarina2
    • #5
    • 12th Jul 18, 11:39 AM
    • #5
    • 12th Jul 18, 11:39 AM
    I would be inclined to pay off extra monthly, depending on how the interest is calculated. If its yearly then save the cash in a savings account and pay a lump sum off, do not lower your repayments keep paying at the same rate, it will pay down the debt quicker. There is a debt repayment calculator somewhere on this site you could put the amount and interest in and see which is the quickest way to pay it off
    • SmlSave
    • By SmlSave 12th Jul 18, 9:54 PM
    • 4,705 Posts
    • 16,560 Thanks
    SmlSave
    • #6
    • 12th Jul 18, 9:54 PM
    • #6
    • 12th Jul 18, 9:54 PM
    Love, any overpayment is better than none - make sure you have an emergency fund first though.

    Re remortgaging in 5 years: that's dependant on interest rates at that time and the equity you hold in your property plus house prices. For example - if interest rates go up and house prices go down you could find yourself paying a lot more so have a play with the mortgage calculators and work out some good and bad scenarios
    Boy Smllet born 23/06/2011 and Girl Smllet born 01/03/2014

    5 year challenge to pay off 20,000
    350 per month challenge
    • Out, Vile Jelly
    • By Out, Vile Jelly 13th Jul 18, 10:45 AM
    • 4,135 Posts
    • 14,065 Thanks
    Out, Vile Jelly
    • #7
    • 13th Jul 18, 10:45 AM
    • #7
    • 13th Jul 18, 10:45 AM
    You'll need to read the terms of your mortgage carefully; there may be a limit as to how much you can overpay annually (mine is up to 10% of the outstanding balance).

    I overpay monthly; the amount I used to save towards the deposit, plus the difference between rental and mortgage payments.

    If you have spare cash each month I would split it between overpaying, easy access saving and higher interest long term saving (if you can find any; I use Premium Bonds as at least there's the thrill of a possible big win).
    They are an EYESORES!!!!
    • Mummy2cheekymonkeys
    • By Mummy2cheekymonkeys 13th Jul 18, 2:11 PM
    • 170 Posts
    • 1,169 Thanks
    Mummy2cheekymonkeys
    • #8
    • 13th Jul 18, 2:11 PM
    • #8
    • 13th Jul 18, 2:11 PM
    Whatever works for you best really. We always had the intention to overpay lump sums but found we always made excuses and it never happened. I rang santander and asked them to change our monthly direct debit to overpay. Now we just make the payment without a second thought. I have also done a couple of bigger payments as lump sums but found the monthly way to be more effective and you don't notice it. Also agree about checking your t&c. Ours is also 10% or we would incur a fee.
    • Slinky
    • By Slinky 13th Jul 18, 3:37 PM
    • 5,446 Posts
    • 25,613 Thanks
    Slinky
    • #9
    • 13th Jul 18, 3:37 PM
    • #9
    • 13th Jul 18, 3:37 PM
    Chucking the spanner into the works, extra payments to your pension where you get tax relief (free money from Govt) may bring you a better return than overpaying your mortgage.
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