Colin
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Registered: 4th Apr 02
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Anyone regularly do this?
I just punched some details into an online calculator and it says if I paid £500 each month in overpayments it would save me £101,680 in interest alone and mean I pay it off in full 21 years and 4 months earlier.
Thats got to be more worthwhile than any savings account / Isa / Shares!?
[Edited on 09-11-2011 by Colin]
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John
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Registered: 30th Jun 03
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It is, check how much you can overpay though, normally some limit.
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Baskey
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Registered: 31st May 06
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It's better than savings because mortgage interest is generally alot higher than what you would earn on your savings. The big downside is that your money is tied up in your house and not accessible like it would be sat in an instant access account should you need it.
It's a great option if you can afford it IMO, and I should really be looking to pull my finger out and up mine.
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Colin
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Registered: 4th Apr 02
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Yep im not sure what the limit is with current lender.
My deals up next year some time so just looking ahead. Might try getting a 10yr term instead of the current one which was 35yr 
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Ben G
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Registered: 12th Jan 07
Location: Essex
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thats a huge saving. i think mine says i can overpay up to 10% extra per month iirc which is only £94.50
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John
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Registered: 30th Jun 03
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What about one of the accounts that you offset the mortgage with your savings Colin?
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Colin
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Registered: 4th Apr 02
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I pay £671 a month just now, with 33yrs left to pay, if I pay £1196 a month its paid in 10yrs time!! Thats crazy....what a con mortgages are!! 
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Colin
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Registered: 4th Apr 02
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quote:
Originally posted by John
What about one of the accounts that you offset the mortgage with your savings Colin?
The one account!? Quite a few folk at work got them!! Think id be best having it more committed though else i'd just spend!
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Ben G
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Registered: 12th Jan 07
Location: Essex
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my dad has a one account, best thing he ever done, he told me.
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Colin
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Registered: 4th Apr 02
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Im 29 now I reckon the target is to be mortgage free by 40 
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Colin
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Registered: 4th Apr 02
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Another interesting calculation/fact, if interest rates climbed the the same highs they were in the 90's my monthly fee would be 1,582.87 
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Colin
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Registered: 4th Apr 02
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quote:
Originally posted by Ben G
thats a huge saving. i think mine says i can overpay up to 10% extra per month iirc which is only £94.50
You would probably shave a good few years off even just overpaying by that amount!!
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Ben G
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Registered: 12th Jan 07
Location: Essex
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probably, should really overpay but always think ''i'll do it 1 month then forget, and it won't make a blind bit of difference in the grand scheme of things''
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Colin
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Registered: 4th Apr 02
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quote:
Originally posted by Ben G
probably, should really overpay but always think ''i'll do it 1 month then forget, and it won't make a blind bit of difference in the grand scheme of things''
Take a look - http://www.moneysavingexpert.com/mortgages/mortgage-overpayment-calculator
If it seems worthwhile then just set up & forget about it!!
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Ian
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Registered: 28th Aug 99
Location: Liverpool
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Not a con is it, it's just maths.
If you have a big debt for a long period of time it costs a lot.
If you reduce the exposure, you pay less.
You're nearly doubling the payment in your figures there, but you are also not therefore accruing compound interest so you more than doubling the benefits. That's where it becomes a good idea.
Worth doing if you can commit the £500pm.
Although if you want a flash car and end up having to take that in finance at a heavy interest rate, the benefits don't look as clear cut because you're paying interest there which you would otherwise have saved.
Just take your entire financial picture and see where the money is better. I don't overpay because I'd rather not take out car loans or have credit cards at a worse rate.
[Edited on 09-11-2011 by Ian]
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Colin
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Registered: 4th Apr 02
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Looking at the paperwork for my current mortgage it says I can make a overpayment each January of no more than 10% of the amount owed. So i'll be doing that, then when the deals up in Sept next year i'll get a 1 account I think with the aim of a 10yr exit.
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Ian
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Registered: 28th Aug 99
Location: Liverpool
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If it's currently 30 and you want to go to 10 I would be thinking about 15 with the option to go over.
10 means you always every single month absolutely need to pay well over a grand. I personally wouldn't enjoy that lack of freedom.
[Edited on 09-11-2011 by Ian]
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Colin
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Registered: 4th Apr 02
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quote:
Originally posted by Ian
Not a con is it, it's just maths.
If you have a big debt for a long period of time it costs a lot.
If you reduce the exposure, you pay less.
You're nearly doubling the payment in your figures there, but you are also not therefore accruing compound interest so you more than doubling the benefits. That's where it becomes a good idea.
Worth doing if you can commit the £500pm.
Although if you want a flash car and end up having to take that in finance at a heavy interest rate, the benefits don't look as clear cut because you're paying interest there which you would otherwise have saved.
Just take your entire financial picture and see where the money is better. I don't overpay because I'd rather not take out car loans or have credit cards at a worse rate.
[Edited on 09-11-2011 by Ian]
I can get cars through my work at 5% APR for pretty much anything. My eyes have been well and truly opened by this.
I read about a guy that paid his mortgage early by 'scoozing' 0% interest CC's lol shame the bubbles kind of burst there!!!
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Colin
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Registered: 4th Apr 02
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quote:
Originally posted by Ian
If it's currently 30 and you want to go to 10 I would be thinking about 15 with the option to go over.
10 means you always every single month absolutely need to pay well over a grand. I personally wouldn't enjoy that lack of freedom.
[Edited on 09-11-2011 by Ian]
Yep plenty to think of but I think I need to do something here, just hit the floor with a thud seeing how much im actually paying back!!
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Ian
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Registered: 28th Aug 99
Location: Liverpool
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It's not burst, you just pay transfer fees and it's not as easy to get the money in to a bank account.
Can still be done if you've a 0% card for purchase and you just blitz that instead of your bank account. That's mathematically similar to a SBT if you can do it quick enough.
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Ian
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Registered: 28th Aug 99
Location: Liverpool
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Did you not do a quick 600 x 12 x 30 in your head when you agreed to it
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Ben G
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Registered: 12th Jan 07
Location: Essex
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quote:
Originally posted by Colin
quote:
Originally posted by Ben G
probably, should really overpay but always think ''i'll do it 1 month then forget, and it won't make a blind bit of difference in the grand scheme of things''
Take a look - http://www.moneysavingexpert.com/mortgages/mortgage-overpayment-calculator
If it seems worthwhile then just set up & forget about it!!
just paying 100 a month from now can finish my mortgage 10 years early, so 25 instead of 35
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Ian
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Registered: 28th Aug 99
Location: Liverpool
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You know what I find funny, most people when offered the mortgage for 25 at that price say no I want lower payments.
Everyone had the option to get a 15/20/25yr deal and I bet the majority of people turned it down as inflexible and expensive.
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Colin
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Registered: 4th Apr 02
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Purse strings were tighter when I entered into this!! I think it was a case of lucky to get a 'deal' over the technicalities of what it amounts to. Now its time to take some action!!
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Colin
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Registered: 4th Apr 02
User status: Offline
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quote:
Originally posted by Ben G
quote:
Originally posted by Colin
quote:
Originally posted by Ben G
probably, should really overpay but always think ''i'll do it 1 month then forget, and it won't make a blind bit of difference in the grand scheme of things''
Take a look - http://www.moneysavingexpert.com/mortgages/mortgage-overpayment-calculator
If it seems worthwhile then just set up & forget about it!!
just paying 100 a month from now can finish my mortgage 10 years early, so 25 instead of 35
Do it....will you miss £97 a month???
I dont want to still be paying off a house when i'm in my 60's!!!
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