Carl
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Registered: 9th May 04
Location: Jimmy Bennett's la la land.
User status: Offline
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had on an unexpected letter which brought good news, my 4 years fixed at 5.99% has ended, gone onto variable rate at 4.99%, looking to move onto a tracker, heard its about 3.5%? however looking at paying same and reducing the term. Think I owe roughly 47 with 21 years left, with some crude estimates that I could knock this to about 16 and pay roughly the same. Is this the way to go you reckon? I only got the letter yesterday so a lot of this is thinking out loud type stuff!
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James
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Registered: 1st Jun 02
Location: Surrey
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I'd keep the term the same and overpay the difference in repayment. Gives you more flexibility but with the same end result.
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Carl
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Registered: 9th May 04
Location: Jimmy Bennett's la la land.
User status: Offline
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quote:
Originally posted by James
I'd keep the term the same and overpay the difference in repayment. Gives you more flexibility but with the same end result.
Won't there be less interest on it if it's over a shorter term or have i got my wires crossed with that?
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James
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Registered: 1st Jun 02
Location: Surrey
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Well if you overpay you'll have paid it off before the end of the term anyway. So it works out the same. But it gives you the flexibility of not overpaying if you need the cash.
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Carl
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Registered: 9th May 04
Location: Jimmy Bennett's la la land.
User status: Offline
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quote:
Originally posted by James
Well if you overpay you'll have paid it off before the end of the term anyway. So it works out the same. But it gives you the flexibility of not overpaying if you need the cash.
I get you, cheers that makes sense.
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James
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Registered: 1st Jun 02
Location: Surrey
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Yeh IMO it's a better idea.
Say for arguments sake that a 25 year term has £1k a month repayment and 35 year term has £750 a month repayment.
If you opt for the 25 year term, your repayment will always be £1k, but if you choose 35 year and overpay the difference (£250), you will still fully repay the mortgage after 25 years, so the total interest will be the same, but you have the choice of not overpaying.
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RichR
Premium Member
Registered: 17th Oct 01
Location: Waterhouses, Staffordshire
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Assuming your lender allows that level of overpayment without penalties. I'm allowed to pay up to 10% of my outstanding balance per year without accruing any charges but it varies from lender to lender.
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_Allan_
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Registered: 24th Mar 04
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I'm only allowed 10% per year also but if I up the monthly payments it is classed a new contract and does not use any of the allowance. In theory you could up to 2K a month etc.. and not have any penalties.
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Carl
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Registered: 9th May 04
Location: Jimmy Bennett's la la land.
User status: Offline
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fixed at 2.8% for 2 year and knocked 5 years off my term to 16 and I'm still paying £20 less, happy days!
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VegasPhil
Premium Member
Registered: 16th Jan 05
Location: Fareham, Hants Drives: Octavia VRS
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Well done for fixing. Mine is up in July.
Can bet that rises will come just before my deal comes up.
Corsa 2.0 16v Vegas - Sold
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Pop
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Registered: 8th May 03
Location: Reading
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quote:
Originally posted by VegasPhil
Well done for fixing. Mine is up in July.
Can bet that rises will come just before my deal comes up.
Ours is up in July too, all being well the rates don't rise and we can fix for at least another 5 years
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