Mortgage over payment query
Discussion
Just got my annual statement thru and as of 1 jan we have £39,982 left to pay.
We're currently over paying £200 month.
I've just whacked in a lump sum of £500 and put the figures in a over payment calculator and it's spat out these figures.
If i up my monthly over payment to £250 we'd save £2638 in interest and pay it off 1 year 5 months early.
If i whack down another £500 lump sum we'd save £2794 interest and pay it off 1 year 5 months early.
.
Is it worth the extra £500 lump sum when i'm only going to save £156 extra interest and we'll still end up paying it off in 2019 regardless.
Should i stick it in a savings account instead ?
We're currently over paying £200 month.
I've just whacked in a lump sum of £500 and put the figures in a over payment calculator and it's spat out these figures.
If i up my monthly over payment to £250 we'd save £2638 in interest and pay it off 1 year 5 months early.
If i whack down another £500 lump sum we'd save £2794 interest and pay it off 1 year 5 months early.
.
Is it worth the extra £500 lump sum when i'm only going to save £156 extra interest and we'll still end up paying it off in 2019 regardless.
Should i stick it in a savings account instead ?
Surely the quick answer is to determine if the interest rate on a savings account less tax is better than the interest rate being charged on your mortgage.
EG ....stick money into a Santander current account etc pays 3% gross....allow for whatever tax your are paying
Is this greater than your mortgage interest rate?
EG ....stick money into a Santander current account etc pays 3% gross....allow for whatever tax your are paying
Is this greater than your mortgage interest rate?
33q said:
Surely the quick answer is to determine if the interest rate on a savings account less tax is better than the interest rate being charged on your mortgage.
EG ....stick money into a Santander current account etc pays 3% gross....allow for whatever tax your are paying
Is this greater than your mortgage interest rate?
The mortgage is 2.50% the santander is 3% minus 20% tax and there monthly fee.EG ....stick money into a Santander current account etc pays 3% gross....allow for whatever tax your are paying
Is this greater than your mortgage interest rate?
The mortgage will be paid off in 2019 it regardless , just a interest saving of £156 to whack down a extra £500 over payment didn't jump out as being that impressive.
I think you have your answer....don't pay off your mortgage....but the OPs comment about sticking any excess funds into a pension is sound advice.
I am retired.......but I still pay into a pension as the government effectively increases my contribution by £120 per month. It would be rude not too.
I am retired.......but I still pay into a pension as the government effectively increases my contribution by £120 per month. It would be rude not too.
33q said:
I think you have your answer....don't pay off your mortgage....but the OPs comment about sticking any excess funds into a pension is sound advice.
I am retired.......but I still pay into a pension as the government effectively increases my contribution by £120 per month. It would be rude not too.
Re my royal mail pension i pay in as much as i'm allowed to so i guess i'd have to start a 2nd private pension.I am retired.......but I still pay into a pension as the government effectively increases my contribution by £120 per month. It would be rude not too.
egor110 said:
Just got my annual statement thru and as of 1 jan we have £39,982 left to pay.
We're currently over paying £200 month.
I've just whacked in a lump sum of £500 and put the figures in a over payment calculator and it's spat out these figures.
If i up my monthly over payment to £250 we'd save £2638 in interest and pay it off 1 year 5 months early.
If i whack down another £500 lump sum we'd save £2794 interest and pay it off 1 year 5 months early.
.
Is it worth the extra £500 lump sum when i'm only going to save £156 extra interest and we'll still end up paying it off in 2019 regardless.
Should i stick it in a savings account instead ?
Your savings of £2794 from a £500 lump sum over payment is wrong. Check your figures before making any decisions!We're currently over paying £200 month.
I've just whacked in a lump sum of £500 and put the figures in a over payment calculator and it's spat out these figures.
If i up my monthly over payment to £250 we'd save £2638 in interest and pay it off 1 year 5 months early.
If i whack down another £500 lump sum we'd save £2794 interest and pay it off 1 year 5 months early.
.
Is it worth the extra £500 lump sum when i'm only going to save £156 extra interest and we'll still end up paying it off in 2019 regardless.
Should i stick it in a savings account instead ?
CarlosFandango11 said:
egor110 said:
Just got my annual statement thru and as of 1 jan we have £39,982 left to pay.
We're currently over paying £200 month.
I've just whacked in a lump sum of £500 and put the figures in a over payment calculator and it's spat out these figures.
If i up my monthly over payment to £250 we'd save £2638 in interest and pay it off 1 year 5 months early.
If i whack down another £500 lump sum we'd save £2794 interest and pay it off 1 year 5 months early.
.
Is it worth the extra £500 lump sum when i'm only going to save £156 extra interest and we'll still end up paying it off in 2019 regardless.
Should i stick it in a savings account instead ?
Your savings of £2794 from a £500 lump sum over payment is wrong. Check your figures before making any decisions!We're currently over paying £200 month.
I've just whacked in a lump sum of £500 and put the figures in a over payment calculator and it's spat out these figures.
If i up my monthly over payment to £250 we'd save £2638 in interest and pay it off 1 year 5 months early.
If i whack down another £500 lump sum we'd save £2794 interest and pay it off 1 year 5 months early.
.
Is it worth the extra £500 lump sum when i'm only going to save £156 extra interest and we'll still end up paying it off in 2019 regardless.
Should i stick it in a savings account instead ?
CarlosFandango11 said:
egor110 said:
£2685 ? the £500 lump sum is as well as £250 extra per month.
Ah, ok.Even £156 from a £500 lump sum sounds wrong if your mortgage will be paid off in 2019, unless your mortgage rate is over 7%
current mortgage £39.982
remaining term 5 years ( we're on the svr so there is no actual term)
standard monthly payments £503
mortgage type repayment
one off repayment £500
recuring overpayment £250 per month
and it spits out : Overpaying would save you £(2,638) in interest alone,
and mean you pay the debt off in full 1 years & 5 months earlier.
Normally you repay £503 per month. If you overpay a lump sum of £500 and a regular overpayment of £250, you'd be mortgage free 1 years and 5 months earlier. Your total payment over this period would be £32,820.
Your remaining debt
(assuming your interest rate stays the same)
YEAR WITHOUT WITH OVERPAYMENT
0 £39,982 £39,982
1 £30,207 £26,895
2 £21,416 £15,578
3 £13,509 £5,399
4 £6,398 £0
5 £0 £0
One last question , when the mortgage is down to £5000 is it worth getting a 0% credit card and using that to pay off the mortgage?
May as well pay 0% rather than 2.5% although i'm sure it's not that simple.
Edited by egor110 on Friday 22 January 19:09
egor110 said:
I'm using this calculator http://www.moneysavingexpert.com/mortgages/mortgag...
current mortgage £39.982
remaining term 5 years ( we're on the svr so there is no actual term)
standard monthly payments £503
mortgage type repayment
one off repayment £500
recuring overpayment £250 per month
and it spits out : Overpaying would save you £(2,638) in interest alone,
and mean you pay the debt off in full 1 years & 5 months earlier.
Normally you repay £503 per month. If you overpay a lump sum of £500 and a regular overpayment of £250, you'd be mortgage free 1 years and 5 months earlier. Your total payment over this period would be £32,820.
Your remaining debt
(assuming your interest rate stays the same)
YEAR WITHOUT WITH OVERPAYMENT
0 £39,982 £39,982
1 £30,207 £26,895
2 £21,416 £15,578
3 £13,509 £5,399
4 £6,398 £0
5 £0 £0
One last question , when the mortgage is down to £5000 is it worth getting a 0% credit card and using that to pay off the mortgage?
May as well pay 0% rather than 2.5% although i'm sure it's not that simple.
Ive worked it out - you've broken their calculator!!!current mortgage £39.982
remaining term 5 years ( we're on the svr so there is no actual term)
standard monthly payments £503
mortgage type repayment
one off repayment £500
recuring overpayment £250 per month
and it spits out : Overpaying would save you £(2,638) in interest alone,
and mean you pay the debt off in full 1 years & 5 months earlier.
Normally you repay £503 per month. If you overpay a lump sum of £500 and a regular overpayment of £250, you'd be mortgage free 1 years and 5 months earlier. Your total payment over this period would be £32,820.
Your remaining debt
(assuming your interest rate stays the same)
YEAR WITHOUT WITH OVERPAYMENT
0 £39,982 £39,982
1 £30,207 £26,895
2 £21,416 £15,578
3 £13,509 £5,399
4 £6,398 £0
5 £0 £0
One last question , when the mortgage is down to £5000 is it worth getting a 0% credit card and using that to pay off the mortgage?
May as well pay 0% rather than 2.5% although i'm sure it's not that simple.
Edited by egor110 on Friday 22 January 19:09
Your normal payment of £500 per month adds up to 30k over your five year term, which is less than the 40k mortgage you have outstanding, so you can't possibly pay it off over 5 years.
The website can't deal with this and the your saving of £(2,638) is a negative amount, and the results that it has produced are nonsense.
You need to enter a term that is consistent with your normal payment of £503 or the interest rate and 5 years and you'll get some better answers...
CarlosFandango11 said:
egor110 said:
I'm using this calculator http://www.moneysavingexpert.com/mortgages/mortgag...
current mortgage £39.982
remaining term 5 years ( we're on the svr so there is no actual term)
standard monthly payments £503
mortgage type repayment
one off repayment £500
recuring overpayment £250 per month
and it spits out : Overpaying would save you £(2,638) in interest alone,
and mean you pay the debt off in full 1 years & 5 months earlier.
Normally you repay £503 per month. If you overpay a lump sum of £500 and a regular overpayment of £250, you'd be mortgage free 1 years and 5 months earlier. Your total payment over this period would be £32,820.
Your remaining debt
(assuming your interest rate stays the same)
YEAR WITHOUT WITH OVERPAYMENT
0 £39,982 £39,982
1 £30,207 £26,895
2 £21,416 £15,578
3 £13,509 £5,399
4 £6,398 £0
5 £0 £0
One last question , when the mortgage is down to £5000 is it worth getting a 0% credit card and using that to pay off the mortgage?
May as well pay 0% rather than 2.5% although i'm sure it's not that simple.
Ive worked it out - you've broken their calculator!!!current mortgage £39.982
remaining term 5 years ( we're on the svr so there is no actual term)
standard monthly payments £503
mortgage type repayment
one off repayment £500
recuring overpayment £250 per month
and it spits out : Overpaying would save you £(2,638) in interest alone,
and mean you pay the debt off in full 1 years & 5 months earlier.
Normally you repay £503 per month. If you overpay a lump sum of £500 and a regular overpayment of £250, you'd be mortgage free 1 years and 5 months earlier. Your total payment over this period would be £32,820.
Your remaining debt
(assuming your interest rate stays the same)
YEAR WITHOUT WITH OVERPAYMENT
0 £39,982 £39,982
1 £30,207 £26,895
2 £21,416 £15,578
3 £13,509 £5,399
4 £6,398 £0
5 £0 £0
One last question , when the mortgage is down to £5000 is it worth getting a 0% credit card and using that to pay off the mortgage?
May as well pay 0% rather than 2.5% although i'm sure it's not that simple.
Edited by egor110 on Friday 22 January 19:09
Your normal payment of £500 per month adds up to 30k over your five year term, which is less than the 40k mortgage you have outstanding, so you can't possibly pay it off over 5 years.
The website can't deal with this and the your saving of £(2,638) is a negative amount, and the results that it has produced are nonsense.
You need to enter a term that is consistent with your normal payment of £503 or the interest rate and 5 years and you'll get some better answers...
egor110 said:
It's £500 per month plus the extra £250 , so i'm actually paying £750 total a month.
You entered a normal payment of 500 per month which the calculator can not cope with.To get a meaningful answer, you can do as I said in my last post or enter 750 as your normal payment.
Presumably your SVR is 5% or a bit more, then a saving on interest being paid of £130 to £150ish is probably about right then. Might be worth think about re-mortgaging?
Edited by CarlosFandango11 on Saturday 23 January 00:04
CarlosFandango11 said:
egor110 said:
It's £500 per month plus the extra £250 , so i'm actually paying £750 total a month.
You entered a normal payment of 500 per month which the calculator can not cope with.To get a meaningful answer, you can do as I said in my last post or enter 750 as your normal payment.
Presumably your SVR is 5% or a bit more, then a saving on interest being paid of £130 to £150ish is probably about right then. Might be worth think about re-mortgaging?
Edited by CarlosFandango11 on Saturday 23 January 00:04
If i put in 2.50 % , over 5 years, with the £500 one off over payment and £250 over payment each month that comes up with:
Overpaying would save you £753 in interest alone,
and mean you pay the debt off in full 1 years & 4 months earlier.
Normally you repay £710 per month. If you overpay a lump sum of £500 and a regular overpayment of £250, you'd be mortgage free 1 years and 4 months earlier. Your total payment over this period would be £41,823.
Your remaining debt
(assuming your interest rate stays the same)
YEAR WITHOUT WITH OVERPAYMENT
0 £39,982 £39,982
1 £32,380 £28,834
2 £24,586 £17,915
3 £16,595 £6,721
4 £8,401 £0
5 £0 £0
The interest saved is a lot less lower than i thought it would be but still on track for getting rid of it by 2019.
Thanks for the assistance.
Not much help and not a financial expert in any way but I found a couple of spread sheets on line (via Moneysaving expert forums as it happens) that gave a better guide than the online generic over payments. But I had to put the full details into that spread sheet, however I could fettle it with any over payments already made and mess around with expected overpayments. It gave me a good insight as to where it was going and when the end was if payments kept up etc.
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